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Daily Newsletter, Sunday, 04/18/2004

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The Option Investor Newsletter                   Sunday 04-18-2004
Copyright 2004, All rights reserved.                        1 of 5
Redistribution in any form strictly prohibited.

In Section One:

Wrap: Tech Wreck
Futures Market: See Note
Index Trader Wrap:
Editor's Plays: Electric Shock?
Market Sentiment: Investors Still Cautious
Ask the Analyst: Warning!  Two stop rule ....
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 04-16        WE 04-09        WE 04-02        WE 03-26
DOW    10451.97 +  9.94 10442.0 - 28.56 10470.6 +257.62 + 26.37
Nasdaq  1995.74 - 57.12 2052.86 -  4.31 2057.17 + 97.15 + 19.55
S&P-100  554.94 -  1.18  556.12 -  1.98  558.10 + 14.58 -  0.16
S&P-500 1134.57 -  4.76 1139.33 -  2.48 1141.81 + 33.75 -  1.68
W5000  11078.08 - 87.98 11166.1 - 36.36 11202.4 +362.24 - 12.80
SOX      480.14 - 31.64  511.78 -  2.08  513.86 + 34.61 + 15.90
RUT      583.37 - 14.51  597.88 -  5.57  603.45 + 30.53 +  2.18
TRAN    2939.47 + 12.59 2926.88 - 39.78 2966.66 +130.76 + 49.07
VIX       14.99 -  1.35   16.34 +   .69   15.64 -  1.69 -  1.82
VXO       15.67 -  0.16   15.83 +   .27   15.56 -  1.65 -  1.95
VXN       22.30 +  0.92   21.38 +   .03   21.35 -  1.69 -  2.95
TRIN       1.47            0.82            0.52            0.89
Put/Call   0.76            0.74            0.68            0.77
******************************************************************

Tech Wreck
by Jim Brown

The Nasdaq struggled with the psychological 2000 level Friday
as the list of techs with earnings problems continues to grow.
The Nasdaq was negative most of the day while the cyclical
heavy Dow rallied out of its mid week slump. Helping keep
the major indexes out of the ditch was the Russell which
moved higher and away from the 575 support.

Dow Chart - Daily


Nasdaq Chart - Daily


SOX Chart - Daily



Friday produced another mixed message with the Dow up +55
and the Nasdaq down -6. Earnings messages and the economic
outlooks were mixed and traders could not make up their
mind between rising economy and higher rates or weaker
economy and continued lower rates. You can't have both and
traders were trying to decide how much of a rate increase
they could bear and what stocks were worth at that rate.

Complicating the outlook was less than expected earnings and
guidance from numerous tech leaders. While most companies
were beating estimates and raising guidance they were lost
in the crowd. Those posting less than expected results or
weak guidance produced significant disappointments and the
market fixated on those few.

Leading the losers list were IBM, IPIX, LEXR, NFLX, SNDK,
NOK, SUNW, INTC, MCDT, DCLK and CY to name a few. All were
a disappointment to traders and most suffered substantial
losses. Those losses knocked the Nasdaq for a -57 point
loss for the week and where it closed under 2000 once again.

The excuse for the week was given as the threat of rising
interest rates but there are still those voices in the
background suggesting the economy is not as hot as the
economics suggest. We had an unexpected drop in Industrial
Production in March as reported on Friday. The -0.2% drop
compared to estimates for a +0.2% gain may not have earth
shaking but it was looked at carefully for signs of weakness.
There was no major change in any of the components and
Capacity Utilization only fell -0.2%.

Consumer Sentiment numbers for April also fell unexpectedly
to 93.2 from 95.8 in March and well below estimates as high
as 98.5. This is the lowest level for the index since Dec-03.
The present conditions component dropped -2.7 points. Most
analysts feel the drop is due to high energy prices, the
recent drop in the market, terror news and candidates bashing
the economy. If the jobs environment continues to improve
and the tax refunds appear this drop in confidence should
evaporate.

The initial fund flows for the week according to estimates
from TimTabs.com were in the neighborhood of +$1.6 billion
into equity funds. While this is not a lot of money it was
a positive number and suggests there was not a rush of tax
withdrawals. It is however only an estimate through Wednesday.
By the time we get the final numbers next week it could be
negative.

The economic calendar for next week is light with the real
danger coming not from reports but from the eleven speeches
from Fed heads. Greenspan speaks on Tuesday and Wednesday
with the Wednesday speech being the critical event. Broadus
went on record Friday as saying the Fed would have to wait
for "some time" before raising rates. He also said the Fed
would have to see definite confirmation of the recovery
before they could take action. This tended to calm the rate
fears for the day but the Greenspan speech on Wednesday
before the Joint Economic Committee of Congress has been
used in the past to warn of coming changes. Traders will
be watching carefully for signs of patience or signs of
change. On Thursday Bies and Bernanke both speak on the
current economic outlook in separate appearances. This
flurry of speeches on the economic recovery should put
the bond groupies into overload mode.

Putting traders into information overload mode will be
earnings from over 500 companies. Some of the more visible
companies include AMZN, AMGN, BRCM, MCHP, MSFT, UTX, EBAY,
JNPR, QCOM, MMM, MO. There are at least 20 chip companies
reporting and the SOX needs a lot of help. It remains to
be seen if these earnings will help it or hurt it. The
semiconductor earnings so far have been split almost
equally between positive and negative.

The lack of excitement over the current crop of earnings
is not because they are bad. In fact they are excellent.
Of the 94 S&P companies already reported 68 beat estimates,
16 reported inline and only 10 missed estimates. This is
very strong results and First call said today the current
numbers are just over +19% growth. Even with the crop of
high profile disappointments they are still expecting
something over 20% for the quarter. The challenge as I
have pointed out before is that this is the peak quarter.
It is all down hill from here. According to First Call
today they are only expecting earnings growth in the
second quarter of +15%, +12% for Q3 and +13% for Q4.
Stocks are currently priced for that 20% growth we have
seen for the last three quarters and a drop to 12-13%
would be a letdown. Obviously investors are hoping the
numbers for the next three quarters are revised up after
the current earnings cycle but without some better guidance
than what we have seen already the odds are slim. Without
some better economics the chances decline even further.
Add in a rate hike in August and another in November as
the Fed funds futures are predicting and the odds decrease
even further.

It is not that +15% growth per quarter is not good it
is just that investors are spoiled after the great run
we had over the last year and the last three quarters of
+20% growth. They have been promised the economic moon for
over a year and the skies are still cloudy. Investor risk
is growing and we are not seeing a lot of buyers stepping
up to buy that risk. Investors buy risk at the lows not
at the highs. I listened to one fund manager on Friday
that said his universe of buyable stocks had dropped from
over 600 two years ago to less than 100 today and he was
already invested in most of the 100. He was a value buyer
and we do not know what his selection criteria was but
in his eyes the market was still over valued based on the
12-18 month outlook. Another manager of a growth fund said
he was 35% in cash. Same problem in his eyes, everything
is overpriced compared to future earnings and event risk.
Both said retail investors were chasing results based on
historical results (last 12 months) and not pricing in the
future outlook. These are just two funds out of thousands
but the sentiment seems to be the same day in and day out.

I do not want to be seen as Chicken Little. I am not trying
to paint a picture of a market crash ahead. I don't see it
at this time. What I am seeing is a lack of excitement and
lack of a catalyst to drive the market to new highs. Maybe
that excitement will appear after next weeks earnings but
that is not a normal historical April trend. I think we
are entering a stock pickers market. The out performers
are going to move higher and the rest of the pack is going
to consolidate for the summer.

Jeff and I were talking this week about market outlook and
I based my cautionary view on the breakdown in those stocks
that have been bullet proof like SYMC and EBAY. Plus, the
market is not going up with the four biggest techs, INTC,
MSFT, IBM and HPQ trading at or near their recent support
lows. Intel is 42 cents from a seven-month low. HPQ is 90
cents from a six month low. IBM is only $2 from a multi
month low and after the weak guidance on Thursday it should
be there soon. There is simply no strength in techs and this
is a normal April/May syndrome. It is nothing to worry about
as it is just a normal consolidation phase while traders
become accustomed to the new outlook.

The Dow rebounded +54 on Friday to end the week flat at
10450. Considering we spent three days testing 10325 support
this is a positive sign. We have strong support below us
and strong resistance above at 10550-10650. This would be
a great range to trade while we wait for the earnings cycle
to pass. It is high enough to keep investors from fleeing
the market but not at the nosebleed levels that would
tempt the hedge funds to load up on shorts. Should the
range break at 10300 then 10000 would be the next natural
level for buyers to appear.

The Nasdaq closed just under 2000 with a -57 point loss for
the week. This puts it right in the middle of its range from
1900-2100. Again, this would be a great range to trade while
we wade through earnings from several hundred more techs.

For next week I am expecting a positive open on Monday if
there are no negative events over the weekend. I would
expect any Monday rally to fail as we approach the Greenspan
testimony on Wednesday. Microsoft does not report until
Thursday but several hundred other companies will keep our
focus blurred. Monday earnings include MMM, LLY, FNM, LXK,
CD, JDAS, KFT, IDXX and CNF to name a few. CNF is on the
verge of a breakout at $36 and is leading a transportation
sector rebound. MMM is nearing resistance at $85 and could
see some profit taking on less than exciting numbers but I
think they will surprise. CD is the sleeper and needs some
good news to justify its rise but I think it to will beat.
Don't be too quick to jump into the next trade and try to
look for entries at the top and bottom of the ranges I
mentioned. Entering in the middle significantly increases
your risk.

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

SAME OH SAME OH
By Leigh Stevens
lstevens@OptionInvestor.com

THE BOTTOM LINE –
All the indices have fairly similar patterns from a technical
perspective - that is, significant tops seem to have formed and
the indices now look like they are headed down to retest prior
lows again.  If so, what happens at the support areas that I will
describe in my specific index comments will tell us if there is
going to be a further downswing that carries prices lower than
the initial bottoms that formed recently.

Prices are in mid range between downtrend and uptrend lines and
those lines form the two sides of a triangle pattern. To stake
out any major call or put position requires waiting for a
breakout one way or the other.  Puts bought at the recent top
should be held as momentum is down.

The market appears to have discounted better earnings but not
what happens next with the Fed and interest rates. This influence
is causing potential buyers to back off and take a wait and see
attitude.

FRIDAY'S TRADING ACTIVITY -
The interest-rate sensitive stocks rallied this past week, after
the latest economic data sent conflicting signals on the health
of the economy, raising hopes of a slower pace in the expected
rise in interest rates.  This accounted for the run up in the Dow
and only marginal decline in the S&P.

In a continuation of the range bound trade that I thought would
unfold over this past week, the S&P 500 Index (SPX) fell 0.4
percent to finish the week at 1,134. The Dow ended at 10,451,
managing to eke out a 1 tenth of a percent gain.  The Nasdaq lost
nearly 3% on the week, closing at 1995.

We got some reports on Friday, with March industrial production
figures showing a 0.2% decline.  This was weaker than the
consensus forecast of +0.3%.  This figure came after a large 0.8%
rise in February. Capacity utilization held steady at 76.5%, down
slightly from February's 76.8% - as noted on our morning report
on Friday, there is plenty of idle capacity that can get ramped
up in the future in our nation's factories.

The University of Michigan's April Sentiment reading of 93.2,
which was below economists' forecast of 97.0 and just off March's
95.8 reading. The U. of M. survey showed that some decline in
April's consumer positive sentiment appeared to be largely due to
the Iraq war and other international tensions, included terrorism
such as occurred in Spain.  However, sentiment toward the job
outlook was more optimistic then reported previously.

On Tuesday, the Fed chairman Greenspan is due to address the
Senate Banking Committee; on Wednesday, he's slated to testify
before the Joint Economic Committee.

The Street seems to feel that Chairman Greenspan may use his
appearance to suggest that the days of the Fed accommodation
toward keeping rates low might be nearing an end. No doubt eyes
will be on this testimony and what happens in Iraq.  The UN
mission there seemed to make some headway with our Administration
as far as going along with suggestions to not hand things over to
our hand-picked Council in the power transfer ahead.  Rather, the
idea is to reach out to more popular or at least well-known and
trusted figures in the country.

March leading indicators for last month (March) is due on Monday
and the talk was for a slight rise, after an unchanged February.
There is a supplier delivery index release due, as well as March
durable-goods orders - release is Friday and while it is expected
to show a rise of maybe 1 and half percent, this would be off
from a 2.5% increase for February.

MY INDEX OUTLOOKS –

S&P 500 Index (SPX) – Daily chart:

The rounding top pattern outlined on the S&P 500 Daily chart
below is bearish unless prices manage to break out about the
circular arc at 1140.  A close over this level is needed to
negate this bearish view, coupled with an ability to find support
at the same level - 1140 - on subsequent pullbacks. Major
resistance is indicated at 1160, the approximate area of all the
rally highs that have been formed over the first months of this
year.

Support is implied at the intersection of the up trendline in the
1105 area.  A dip under 1100-1105 would suggest that the prior
relative lows at 1087-1090 could be tested as support - any close
under this area would suggest that a second down leg was
underway.



S&P 100 Index (OEX) – Daily chart:
Resistance is at 560 at the current intersection of the down
trendline.  A close over 560-563 is needed to turn the chart
bullish and suggest that a retest of strong resistance in the 570
area was possible.

The large number of relative highs in this area over several
weeks suggest that a new influence is needed in the market to get
buyers to bid S&P stocks through this area. Hey, the bulls have
had their chance - many times!

Support is at 540 - a break of the trendline there would suggest
at least a re-test of the prior swing lows at 532-533.  I figure
that if the trendline doesn't hold, that the prior lows won't
either.




Indicators such as my Call to Put volume indicator and the
stochastic model are suggesting lower levels ahead.

S&P 100 Index (OEX) – Weekly chart:
The weekly chart below doesn't show a lot that is different from
the Daily chart, but the weekly price history is a good reminder
of far the rally has carried the big S&P stocks, without there
being much of a downside correction.

The 522-524 area, at the last cluster of weekly highs in the
fall, is a likely next support if 532-533 gives way.  What was
resistance over several weeks could now represent a next support.




Dow Industrials (INDU) Daily:
The key "line" of resistance in the Dow 30 is at 10,535-10,575.
Not much new to say here, except that it seems more likely the
INDU will fall to the area of lower (up) trendline rather than
achieve a bullish breakout above the resistance and selling
interest apparent at the lows made back in late-Feb/early-March.

Support at the lower trendline is at 10,200. Major support is in
the 10,000 area. So, what else is new.  The rally that developed
off the midweek low may not go anywhere in the coming week.




The stochastic and RSI indicators shown above, as well as the
same kind of rounding top pattern apparent in the S&P, suggest
still-downward momentum ahead.  It would be a common pattern for
there to be a second decline (after the first), when there were
so many weeks when the market couldn't get to new highs. Stay
tuned on that.

Nasdaq Composite (COMPX) Index  – Daily:
I mentioned the triangular pattern formed from a series of lower
relative highs versus the long-standing up trendline which is now
intersecting just above the 200-day moving average.  Support is
at 1950, 1925, then at 1900.  I consider that what happens if the
Composite gets back down to the 1950 area as the most significant
technically.  I would like to think bullishly on the outlook for
my tech stock darlings (I'm sort of a technophile), but can't get
to this view unless there is a close over 2075.




Nasdaq 100 (NDX) Index  – Daily:
1500 is key resistance, at the trendline - a close over this
level AND the ability to hold this area on pullbacks to it, would
get me bullish for at least a re-test of the prior 1550 high.

The upside price gap of two weeks ago was "filled in", consistent
with the old adage that gaps (tend to) get filled - the gap area
is the space marked by the two parallel green lines on the chart
below. Support is highlighted at 1400, by both the intersection
of the up trendline and the 200-day moving average. The trend
looks to be for lower prices ahead.




Nasdaq 100 tracking Stock (AMEX:QQQ)– Hourly:
Resistance levels are at 36.15, 36.75, then 37.25 - this later
level being pretty key as highs formed in the 36.25-36.50 area
over an extended period of time.  Hey, you only get so long to
prove your case and the bulls have not been able to carry QQQ to
new highs.

The hourly chart shows a definite bearish aspect as tops have
Support looks to be at 35.50 based on prior highs, then prior
lows, on the hourly chart below - at the green dashed level line.
I would consider being a buyer if QQQ got to 34-34.50 again,
especially if prices then held this area over a 2-3 day period.
I suggest selling at 36.60, buying at 34.25-34.50, if reached.




Good Trading Success!


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

Electric Shock?

With TASR acting like an Internet stock in 1999 with monster
moves on a daily basis I am resurrecting a strategy we used
on those high flyers. This is the combination write. It
requires the ability to write "naked" options.

The combination write involves writing both a naked call
and a naked put on the same stock at the same time. You
take in two premiums but only have one margin requirement
as there is no way you can be in the money on both at the
same time.

Using TASR which closed at $114 on Friday I am going to
draw the example using the May $120 Call and the May $110
Put.

We will sell both naked at the open on Monday and then wait.
If TASR moves over $120 we go long the stock to cover the
naked call. That puts us in an in the money covered call
play. We will remain long the stock as long as it is over
$120. Should it fall back under $120 we close the stock
position and leave the call open.

The same strategy is true regarding the put. Should TASR
drop below $110 we will short the stock to cover our put.
(make sure your broker has TASR available to short before
starting this play) As long as TASR stays under $110 we
will remain short the stock. If it rebounds back over $110
we will cover the stock position and leave the put open.

This may seem like a high-risk trade but if you think about
it the risk is minimal.

If TASR goes in the money on either side we either go long
or short and it becomes a covered play with no risk. If
TASR remains between $110-$120 both options will expire
worthless. Obviously the chances of that happening are
very slim. It will definitely be directional before the
week is out. It could be $50 or $150 but either direction
would be covered. It is just a fancy covered call/put and
produces more premium income than just a single side alone.

Risk:

Yes there is risk. The risk is that TASR will bounce around
one of the strike points ($110/$120) and cause you to sweat
the direction and the cover order.

Let's put this in perspective.

The May $120 Call is currently $10.30
The May $110 Put is currently $12.90

If you sell them both at the open on Monday you receive
$23.20 in premium income. Regardless of the outcome of the
stock price that income is yours to keep.

That $23.20 also provides you a cushion for your stock fills.
Let's say you have an order to buy TASR at $120 and you are
filled at $120.25. No sweat you have a lot of cushion left.
You could fill .25 away from the order a dozen times and
still only lose $3.00.

The object of this game is not to trade the stock. We do
not want to trade it any more than necessary.

THE BEST SCENARIO IS FOR A TRIGGER THE FIRST DAY THAT IS
NEVER HIT AGAIN.

We want the stock to rocket over $120 or plunge under $110
and stay there the next four weeks. With that scenario we
cover once and let it ride. At the end of the four weeks
we are either called away or the stock is put to us to
cover our short position. Either way is perfectly fine.

Based on Friday's trading and the Taser earnings on Tuesday
it should be highly directional by Wednesday. Penthouse or
basement, we don't care.

Assume the stock rocketed over $120 in anticipation of
earnings. We go long the stock and sit back and wait. It
could stay at nose bleed heights for a week or two and then
fall back through the trigger zone. When it drops below $120
you sell the stock and remain flat the stock unless it goes
below $110 or over $120 again. You simply cover whichever
side is triggered and maintain a watch and a reverse order
in case it happens again.

The risk remains that you could be forced to cover only
once or possibly multiple times over the next four weeks.

YOU MUST REMAIN COVERED WHENEVER YOU ARE IN THE MONEY.

May $120 Call QUR-ED $10.30 bid
May $110 Put  QUR-QB $12.90 bid

If this is your first exposure to this strategy I suggest
you paper trade this one until expiration to get the hang
of it. There is always another trade in the future.

Here is the only catch:

TASR has announced a 2:1 split for April-30th. If TASR
is well above or below the trigger points and you are
in a covered position I would continue to let the position
run. The strikes will be cut in half and you will end up
with two $55 puts and two $60 calls. You will need to
adjust your stock position on any future buy/sells to
account for the extra shares/contracts.

Another reason for holding over the split is the normal
drop in volatility and premiums the following day. The
more the premiums shrink the better should you decide
to cover before expiration.

If you have any questions email me and I will try to
answer them.

If you want to reduce your risk of over trading then
simply move out to farther strikes. Sell the $125 call
and the $105 put. That produces smaller premium income
but gives you a $20 spread in the middle where you do
not need to be covered.

TASR Chart - Daily




Warning: If this TASR trade is not managed correctly
extreme losses may occur. By entering this trade you
acknowledge the risks and accept responsibility for
your actions. This is NOT a fire and forget play.


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


Two Thirds Completed


The NWS leap play from last Sunday called for a staggered
entry into six Jan-2006 $40 calls. The game plan called for
buying (2) Call leaps with a touch of $37 and (2) more with
a touch of $36. Both of those should have been filled on
Tuesday and Thursday of last week. The final (2) contracts
are targeted for an entry on a touch of the 200dma currently
at $34.68.

We are ready to begin writing short-term calls against this
position to reduce our cost. The first lesson is that you
do not sell calls on a dip. You only sell calls on a spike.
This increases the value and reduces the risk the spike
will continue and have the calls expire in the money.

We will continue to monitor the price and look for something
in the $40 range to sell the $45 calls.

Recap:

If you are following this play you should have filled
on these two entries.

Buy (2) Jan-2006 $40 Calls WLN-AH at $37 = $4.30
Buy (2) Jan-2006 $40 Calls WLN-AH at $36 = $3.90

Still unfilled:

Buy (2) Jan-2006 $40 Calls WLN-AH with a touch of
200dma (currently $34.68)

http://members.OptionInvestor.com/editorplays/edply_041104_1.asp


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

Investors Still Cautious
- J. Brown

Whew!  Friday just ended a very busy week with dozens of
corporate earnings reports and a basketful of economic news all
vying for investors' attention against a backdrop of rising
violence in Iraq, hostages being taken by insurgents, Bin Laden
tapes, 9/11 commission hearings and a Presidential press
conference.  At the top of the list was concern over a strong
rise in inflation and when the Federal Reserve will raise rates.
Considering this cacophony of news and worries I'm encouraged
that the markets held up as well as they did.  Granted the
NASDAQ's breakdown under the 2000 level on Friday is concerning
but it was hastened by a big decline in the semiconductor and
Internet sectors.

This coming week will release a flood of earnings reports with
hundreds of companies announcing.  Through the billowing cloud of
announcements stands one event Wall Street will most likely focus
on.  That is Alan Greenspan's appearances on Tuesday and
Wednesday before congress.  What he has to say about the state of
the economy and any hints he may drop regarding monetary policy
will be paramount.  Hopefully, he'll reiterate some of Fed
governor Broadus' comments on Friday suggesting the Fed can still
afford to be "patient".

Personally, I'm cautiously optimistic for stocks next week but
the declining trendline on the Dow needs to be broken.  Plus the
NASDAQ needs to recover the 2000 level soon or I fear it may move
to retest support at its 200-dma.


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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  8235
Current     : 10451

Moving Averages:
(Simple)

 10-dma: 10464
 50-dma: 10448
200-dma:  9911



S&P 500 ($SPX)

52-week High: 1163
52-week Low :  877
Current     : 1134

Moving Averages:
(Simple)

 10-dma: 1138
 50-dma: 1133
200-dma: 1067



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1051
Current     : 1449

Moving Averages:
(Simple)

 10-dma: 1481
 50-dma: 1458
200-dma: 1400



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

Despite all the volatility and options expiration this last week
the volatility indices remain near their lows, which indicates
little investor fear.

CBOE Market Volatility Index (VIX) = 14.94 -0.80
CBOE Mkt Volatility old VIX  (VXO) = 15.67 -0.57
Nasdaq Volatility Index (VXN)      = 22.55 -0.28

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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.77      1,220,955       936,934
Equity Only    0.61      1,043,624       637,847
OEX            1.08         63,054        67,883
QQQ            1.01         96,686        97,984


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

Bullish Percent Data

           Current   Change   Status
NYSE          78.3    - 4     Bull CONFIRMED *new change*
NASDAQ-100    54.0    + 0     Bear Correction
Dow Indust.   90.0    + 0     Bear Correction
S&P 500       75.8    + 0     Bear Confirmed
S&P 100       79.0    + 0     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: 1.29
10-dma: 1.09
21-dma: 1.16
55-dma: 1.18


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    2022      1601
Decliners     811      1495

New Highs     111       101
New Lows       92        26

Up Volume   1110M      518M
Down Vol.    655M     1289M

Total Vol.  1780M     1829M
M = millions


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

Commitments Of Traders Report: 04/12/04

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

We continue to see little change in commercial traders' positions.
Small traders are adding to positions and remain bullish although
there is a decent jump in new shorts.


Commercials   Long      Short      Net     % Of OI
03/23/04      401,456   418,732   (17,273)   (2.1%)
03/30/04      407,987   420,624   (12,673)   (1.5%)
04/06/04      409,429   419,471   (10,042)   (1.2%)
04/12/04      412,827   419,910   ( 7,083)   (0.9%)

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
03/23/04      130,648    89,943    40,705    18.5%
03/30/04      130,112    81,937    48,175    22.7%
04/06/04      130,262    80,174    50,088    23.8%
04/12/04      135,840    89,090    46,750    20.8%

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

Commercials have reduced the long positions and added to their
shorts, which is bearish for the markets.  Small traders remain
net long and have increased their bullish positions significantly.


Commercials   Long      Short      Net     % Of OI
03/23/04      268,647   294,930    (26,283)  ( 4.7%)
03/30/04      265,492   305,797    (40,305)  ( 7.1%)
04/06/04      270,904   328,862    (57,958)  ( 9.7%)
04/12/04      261,889   341,163    (79,274)  (13.1%)

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
03/23/04      131,879     59,210    72,669    38.0%
03/30/04      123,494     59,550    63,944    35.0%
04/06/04      148,737     46,235   102,502    52.6%
04/12/04      172,473     52,274   120,199    53.5%

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


NASDAQ-100

Almost no change in commercial traders' positions here.
The same can be said for small traders.


Commercials   Long      Short      Net     % of OI
03/23/04       52,014     34,017    17,997   20.9%
03/30/04       52,749     67,967   (15,218) (12.6%)
04/06/04       54,862     34,762    20,100   22.4%
04/12/04       54,144     34,432    19,712   22.3%

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
03/23/04        9,884    12,887    (3,003)  (13.2%)
03/30/04        8,928    16,551    (7,623)  (30.0%)
04/06/04        7,971    20,721   (12,750)  (44.4%)
04/12/04        8,297    20,746   (12,449)  (42.9%)

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

Still no change in commercial traders' positions here either.
It's an even race between longs and shorts.  Small traders
have actually grown more bearish.


Commercials   Long      Short      Net     % of OI
03/23/04       23,048    22,119      929       2.1%
03/30/04       23,642    22,180    1,462       3.2%
04/06/04       23,101    22,108      993       2.2%
04/12/04       23,501    22,748      753       1.6%

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
03/23/04        8,344     6,734    1,610     10.7%
03/30/04        7,020     6,711      309      2.3%
04/06/04        7,316     8,085     (769)    (5.0%)
04/12/04        6,136     7,450   (1,314)    (9.7%)

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

Warning!  Two stop rule ....

While the following article may seem like a lecture, I hope
you'll read the article in its entirety, but also consider a
trading discipline called the two stop rule.

This article hopes to address various e-mail I received this week
regarding some stocks, and trades I profiled in the
OptionInvestor.com Market Monitor.

Those traders/investors that have been with us for a while have a
pretty good feel for my personality and philosophy on investing.
I try to express myself with a caring, but firm stance on the use
of stops, and while it can be frustrating to some traders when a
trade is stopped out for a loss, to then see the trade work out
in the direction we had intended, most traders and investors have
learned it is better to have played it safe, than to have been
sorry later.

To try and calm some trader's nerves, I'm going to disclose how I
(Jeff Bailey) really trade / invest in stocks in my own account.

I'm calling it "the two stop rule."

The first stop loss is a level I (Jeff Bailey) don't think a
stock should trade, if it is to have a chance at meeting my
initial trade objective.

The second stop loss is a level I (Jeff Bailey) now concede I may
have been completely wrong, want out of the trade, before the
trade harms my account any more than it has.

Recently, management informed me, and other analysts that we
could no longer trade individual stocks that we personally
profile in any of the newsletters.

At first, I had mixed thoughts on this decision, but I fully
understand the reasons for the decision, based on what we have
all seen happen when the Securities Exchange Commission begins
looking into analyst's/mutual fund's/hedge fund's trade activity
in stocks they recommend.

Gone are the days where full disclosure of ownership or
investment banking is the "get out of jail free" card, if there
is an inkling that the analyst/mutual fund/hedge fund may have
said anything positive or negative about a stock, where that
piece of positive or negative information could have been
mentioned to favorable impact the analyst's/mutual fund's/hedge
fund's financial position in said security.

I had always preferred to have the same position that I was
profiling, where my position was established AFTER I had profiled
the trade.  This gave the trader/investor the confidence that I
(Jeff Bailey) had my money on the line, just as those
traders/investors had their money on the line, based on the
confidence I knew what the heck I was doing.

Why do I discuss the trade policies here?  It is because I have
ALWAYS been more protective of other people's money, or less
aggressive with other people's money than I will be from time to
time with my own.

It is probably for this reason, that I will sometimes use "too
tight of a stop" as noted by some traders, in stock trades that I
profile.

I'm open to "criticism" and I don't take it personally, but I
(Jeff Bailey) must consider that I don't fully know just who my
audience is any given day.  Is it Bob, who just got laid off from
his job and is trying to make a little extra money while looking
for a new job, and is now trading or investing on his own for the
first time?  Or is it Martha, who has been trading/investing in
stock markets long before my parents had ever met?

When I profile a trade, it always comes with an entry point, a
stop loss point and target.  Not every stop is triggered, nor is
every target achieved.

No analysts would expect their following (you) to agree with
everything they say or write.  Some disagree with a
trade/investment direction the analyst has profiled.  Other
disagree with the analyst's price objective, with the thought
that the analyst has underestimated the price/profit potential of
the trade.

All of the above disagreements are understandable, as even these
types of disagreements are what make up a market to begin with.
As long as there are stock markets, there will have to be some
type of disagreement.  That's what makes a stock, or market move.
It's when there is total agreement that things would come to a
halt and there would be no trading taking place.

So where am I taking us with some today's discussion?

How would you feel if you told your close friend to buy ABCD
stock at $25, then told them to sell it at $24, then days later
your friend ask you what is happening to their investment at ABCD
as it has fallen to $20?

"What!???  I thought you sold it at $24!" you proclaim.

Your friend isn't guilty of anything we haven't done with our own
money at some point in time.  There's always a good reason why we
may have not honored a stop.  Something Alan Greenspan said that
day was taken wrong by the market, and tomorrow, everything will
be back to normal and my stock trade will resume the trend I had
predicted.  There, I fell better and now we've helped explain to
ourselves why the stock traded a price level we didn't think it
would trade, and all is OK, except for the paper loss in our
account.

On and on it can go.  A reason can be found to help explain
everything wrong with the world and why a trade has worked
against us, which certainly will be back on course in an hour, a
day, a week, or a month.

Like I said.  We've all done it.  Sometimes we're correct in our
explanation, and sure enough, a minute, hour, or day passes, and
the trade does resume the course we thought it would.

For those that have traded/invested for sometime, we've seen
stocks not recover to the direction of trade we thought they were
going to move as time passed, but we've also seen stocks not
trade as planned, soon regain the direction of our analysis,
where it was a good idea to have not honored the original stop.

I will often trade/invest the latter scenario, where a stock
doesn't act like I thought it should in the early stages of trade
(minutes, hours, days) and will use what I call the two stop
rule.

When I look at a trade on my own, I have a general feel, or idea
for what the stock "should" do, within certain bounds, if it is
to achieve my eventual profit target.

I also look at a trade and determine a second level of trade,
where my conviction then grows that I really have had no clue,
feel, or idea of what the stock is doing, or what the MARKET is
telling me about the stock.  This second level is when its time
to admit my mistake, and move on.

As an analyst that contributes to the market monitor, I think I
can speak for all analysts, that it would be a nightmare to
profile a trade with two separate stops.  Did Bob stop out at the
first stop, but Margaret hang in there with her stop at the
second stop?  Margaret would still be owed coverage of the trade,
as her money is still at risk.

How do I (Jeff Bailey) trade the two stop rule?

I sit at a computer terminal from the opening bell to the closing
bell, and when I do trade, there is rarely a minute that goes by
if I'm day trading that I'm not keeping an eye on the stocks I'm
trading.  I usually can't handle/monitor more than 2 or 3 day
trades at any given time.  Swing trades, which may last 1, 2, 3
days or several weeks, don't warrant a lot of intra-day
attention, where instead of risking a lesser dollar amount to a
stop as in a day trade, there is greater room given to a stop in
a swing trade, where a larger dollar gain is hopefully achieved
over days, if not weeks.

What the "two stop rule" allows a trader and even an investor the
opportunity to do is this.

Let's say I'm day trading Intel (NASDAQ:INTC) $26.45, and on any
given day, a $1 move in the stock, would be deemed a BIG move.

Intel (INTC) is a stock that trades very liquid, where there is a
great deal of volume traded each second, minute, hour, where for
the most part if it were to trade my FIRST stopping point, I
begin to get the feel that my initial analysis might be wrong,
and as the stock trades my FIRST stop, I begin to think there is
little chance that my original profit target will be achieved.

It is at this point that I begin to devise an exit strategy,
where at a worse case scenario, I'd be happy with a break-even
trade, if not a small profit.

However, it will HAVE TO BE the SECOND stop, where I've got to
cut the trade (can be a longer-term investment) as things aren't
making any sense as to my original analysis.

Intel (INTC) - 60-minute interval chart



A rather simplistic example of the two stop rule, but easily
understandable would be a bull's thought toward Intel (INTC) if
having traded the stock bullish at $28, based on what appeared to
be a reverse head and shoulder break above the neckline, just as
the Semiconductor Index (SOX.X) was really starting to show some
sign of renewed strength earlier this month.

Stop #1 at $27 may have made sense, as a stop placed at $26.90
would have equated to a 3.9% loss from the bullish entry at $28,
which for most traders/investors might be deemed a tolerable
amount of risk for a semiconductor stock.  Still, to keep the
trader in the trade, under the scenario of the reverse head and
shoulder pattern still being in play, a trade below $26.72, say
$26.50, would then negate the pattern.

Is there any question that a trade below $26 would negate the
reverse head and shoulder pattern?  Answer:  NO!

Stop #2 at $26 is the ultimate admission that original scenario
was invalid, or in error.  Loss would be taken for a 7.14% loss,
which by most investment/trading discipline is within the 10%
rule generally accepted for risk management.

What the "two stop rule" does at this point, is still allow the
trader/investor the opportunity to assess their trade.

One fact we know at this point is that the Semiconductor Index
(SOX.X) 480.14 has fallen back below some important near-term
support of 500.00, where in a past February 29, 2004 Ask the
Analyst column, we actually discussed the head and shoulder top
pattern presenting itself in the Semiconductor Index (SOX.X), a
BEARISH pattern, where a downside objective of 412.00 was
derived.

While any pattern is not 100% reliable, a trader long Intel
(INTC) at $28, where having now seen the reverse head/shoulder
pattern negated in the above chart, might wish they had stopped
out at Stop #1.

Sometimes, the "two stop rule" allows the trader an opportunity
to exit a trade closer to entry point, where ultimate risk is
still being assessed to Stop #2.

Most day traders would never allow Intel (INTC) to move $1
against them in a single day's trade, but if the above chart were
a 2-minute interval, or 5-minute interval chart day traders may
begin to see the concept of how the "two stop rule" could be
utilized, but where Stop #1 was 25-cents above Stop #2, where
after bullish entry at $28, if Stop #1 were traded, the day
trader may immediately begin reassessing their bullish trade
decision, and looking for an exit on a bounce back to their entry
points, but ready to concede the trade, and take the loss should
Stop #2 be at $27.50 be traded.

Longer-term investors can also utilize the "two stop rule" where
the investor may initiate a bullish position in a stock at
$28.00, where within a short period of time, a news event
suddenly changed the landscape, or the investors scenario toward
the stock, or market environment, and finds the stock at Stop #1
just days after the bullish (or bearish) position was
established.  In essence, the ability of the stock to trade Stop
#1 so soon after bullish entry, may serve as an alert that
something is wrong with the investment scenario, where the
investor may then begin thinking, "If my scenario is to still be
in play, then I expect the stock to return to my bullish entry
point within X-number of days.  If the stock does NOT return to
my bullish entry point within X-number of days, given the
original timeframe for the investment, then either cut the trade
from the account, sell strength back toward entry price, but
HONOR Stop #2."

Conclusion:

What the "two stop rule" may allow traders/investors, is to still
have a disciplined approach to trading/investing OUTSIDE the
scope of trades they see profiled at premierinvestor.net, or
OptionInvestor.com, where you the trader/investor may not
entirely agree with where a stop has been profiled.

Again, every trader/investor has their own tolerance for RISK,
and just because a trade may be profiled where the profiled stop
hopes to limit risk to a 5% loss, YOU the trader/investor may be
willing to take on 10% risk.  If so, YOU the trader/investor may
then begin to view the profiled 5% stop loss as Stop #1, where
YOUR 10% allowance of RISK becomes Stop #2, and may still allow
the trade to reach the potential you and one of the analysts
originally had built the scenario for.

Jeff Bailey


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

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

Symbol  Co               Date           Comment      EPS Est

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

MMM    3M Co                 Mon, Apr 19  Before the Bell     0.87
CD     Cendant Corp          Mon, Apr 19  After the Bell      0.41
CF     Charter One Finl      Mon, Apr 19  After the Bell      0.69
ZNH    China So Airlines     Mon, Apr 19  -----N/A-----        N/A
CNF    CNF Inc.              Mon, Apr 19  After the Bell      0.36
CYH    Comm Health Sys, Inc. Mon, Apr 19  Before the Bell     0.38
DOV    Dover Corp            Mon, Apr 19  After the Bell      0.38
LLY    Eli Lilly             Mon, Apr 19  -----N/A-----       0.66
RE     Everest Re Group, Ltd Mon, Apr 19  After the Bell      2.64
FNM    Fannie Mae            Mon, Apr 19  Before the Bell     1.91
FII    Federated Investors   Mon, Apr 19  Before the Bell     0.49
HAS    Hasbro, Inc.          Mon, Apr 19  Before the Bell     0.03
HU     Hudson Un Bancorp     Mon, Apr 19  After the Bell      0.68
IDXX   Idexx Laboratories    Mon, Apr 19  Before the Bell     0.46
ICBC   Ind Comm Bank         Mon, Apr 19  After the Bell      0.70
AHO    Koninklijke Ahold NV  Mon, Apr 19  -----N/A-----        N/A
KFT    Kraft Foods           Mon, Apr 19  After the Bell      0.43
LXK    Lexmark Intl, Inc.    Mon, Apr 19  Before the Bell     0.87
LNCR   Lincare Hldg          Mon, Apr 19  After the Bell      0.56
MAN    Manpower              Mon, Apr 19  Before the Bell     0.27
MVK    Maverick Tube Corp    Mon, Apr 19  After the Bell      0.46
PKG    Pack Corp America     Mon, Apr 19  After the Bell     -0.02
PRK    Park National         Mon, Apr 19  -----N/A-----        N/A
PH     Parker Hannifin Corp. Mon, Apr 19  Before the Bell     0.89
PPDI   Pharm Product Dvlpmnt Mon, Apr 19  After the Bell      0.43
PCL    Plum Creek Timber     Mon, Apr 19  After the Bell      0.35
PCH    Potlatch              Mon, Apr 19  After the Bell      0.71
RGF    R&G FINL              Mon, Apr 19  -----N/A-----       0.64
SEIC   SEI Invsts            Mon, Apr 19  Before the Bell     0.36
SWBT   Southwest Bank Texas  Mon, Apr 19  After the Bell      0.47
SNV    Synovus Finl Corp.    Mon, Apr 19  -----N/A-----       0.33
TRBS   Texas Regional        Mon, Apr 19  -----N/A-----       0.55
UNT    Unit                  Mon, Apr 19  -----N/A-----       0.36
UDR    Un Dominion Rlty TrustMon, Apr 19  After the Bell      0.37
WB     Wachovia Corp         Mon, Apr 19  Before the Bell     0.90
WM     Wash Mutual           Mon, Apr 19  After the Bell      1.05


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

NDN    99 CENTS Only         Tue, Apr 20  Before the Bell     0.19
ADO    Adecco SA             Tue, Apr 20  Before the Bell      N/A
ADO    Adecco SA             Tue, Apr 20  Before the Bell      N/A
ACS    Affiliated Comp Serv  Tue, Apr 20  After the Bell      0.68
AKZOY  Akzo Nobel N.V.       Tue, Apr 20  -----N/A-----        N/A
ACL    Alcon Inc.            Tue, Apr 20  After the Bell      0.49
MO     Altria Group, Inc.    Tue, Apr 20  Before the Bell     1.13
AMTD   Ameritrade Hldg Corp. Tue, Apr 20  Before the Bell     0.18
AMCC   App Micro Circ Corp   Tue, Apr 20  After the Bell     -0.01
ARB    Arbitron Inc.         Tue, Apr 20  Before the Bell     0.58
ARMHY  ARM Hldg Plc.         Tue, Apr 20  Before the Bell     0.03
ASKJ   Ask Jeeves            Tue, Apr 20  After the Bell      0.18
AVB    Avalonbay Communities Tue, Apr 20  After the Bell      0.78
AVY    Avery Dennison Corp   Tue, Apr 20  During the Market   0.65
ONE    Bank One              Tue, Apr 20  Before the Bell     0.81
BDK    Black & Decker Corp   Tue, Apr 20  Before the Bell     0.92
BLK    BlackRock, Inc.       Tue, Apr 20  Before the Bell     0.69
BCC    Boise Cascade         Tue, Apr 20  Before the Bell     0.29
BSX    Boston Scientific CorpTue, Apr 20  Before the Bell     0.22
EAT    Brinker Intl          Tue, Apr 20  Before the Bell     0.53
CHRW   C.H. Robinson Wrldwd  Tue, Apr 20  After the Bell      0.34
BCR    C.R. Bard, Inc.       Tue, Apr 20  After the Bell      1.03
CECO   Career Education      Tue, Apr 20  After the Bell      0.32
CNT    CENTERPOINT PPTYS TR  Tue, Apr 20  -----N/A-----       1.12
EXP    Centex Const Products Tue, Apr 20  After the Bell      0.74
CTX    Centex Corp           Tue, Apr 20  After the Bell      1.74
CHKP   Chck Pnt Sftwr Tech   Tue, Apr 20  Before the Bell     0.23
CKFR   CheckFree             Tue, Apr 20  After the Bell      0.27
COH    Coach, Inc.           Tue, Apr 20  Before the Bell     0.27
CGNX   Cognex                Tue, Apr 20  After the Bell      0.16
CTSH   Cognizant Tech Sltns  Tue, Apr 20  Before the Bell     0.27
CTC    Co de Telecom de ChileTue, Apr 20  After the Bell      0.14
CVG    Convergys Corp        Tue, Apr 20  After the Bell      0.21
CPO    Corn Products Intl    Tue, Apr 20  Before the Bell     0.48
COT    Cott Corp             Tue, Apr 20  Before the Bell     0.19
CYMI   Cymer, Inc.           Tue, Apr 20  After the Bell      0.17
DV     DeVry                 Tue, Apr 20  After the Bell      0.25
DO     Dmnd Offshr Drll Inc. Tue, Apr 20  Before the Bell    -0.06
DBD    Diebold               Tue, Apr 20  Before the Bell     0.40
DNEX   Dionex                Tue, Apr 20  After the Bell      0.47
D      Dominion Resources IncTue, Apr 20  Before the Bell     1.39
ELNK   EarthLink             Tue, Apr 20  Before the Bell     0.07
ESV    ENSCO Intl            Tue, Apr 20  Before the Bell     0.13
ETH    Ethan Allen Interiors Tue, Apr 20  Before the Bell     0.62
FNFG   1st Niagara Finl GroupTue, Apr 20  Before the Bell     0.15
FTN    1st Tennessee NationalTue, Apr 20  Before the Bell     0.88
FBC    Flagstar Bancorp      Tue, Apr 20  After the Bell      0.54
FRX    Forest Laboratories   Tue, Apr 20  Before the Bell     0.37
FCX    Frprt-McMoRan Cpr Gld Tue, Apr 20  -----N/A-----      -0.17
GM     General Motors Corp.  Tue, Apr 20  Before the Bell     1.79
GNTX   Gentex                Tue, Apr 20  -----N/A-----       0.39
GDW    Golden West Finl      Tue, Apr 20  -----N/A-----       1.92
GPT    GreenPoint Finl       Tue, Apr 20  Before the Bell     0.90
HE     Hawaiian Electric     Tue, Apr 20  -----N/A-----       0.73
HMA    Health Mgmt Ass, Inc. Tue, Apr 20  Before the Bell     0.37
HUBb   Hubbell Incorporated  Tue, Apr 20  During the Market   0.44
ITW    Illinois Tool Works   Tue, Apr 20  Before the Bell     0.82
RX     IMS Health            Tue, Apr 20  After the Bell      0.24
N      Inco                  Tue, Apr 20  -----N/A-----       1.03
IR     Ingersoll-Rand Co.    Tue, Apr 20  Before the Bell     0.87
JKHY   Jack Henry & Ass      Tue, Apr 20  After the Bell      0.17
JRN    Journal Com, Inc.     Tue, Apr 20  Before the Bell     0.16
KELYA  Kelly Serv, Inc.      Tue, Apr 20  Before the Bell     0.03
LIN    Linens 'n Things Inc. Tue, Apr 20  Before the Bell    -0.02
LU     Lucent Tech Inc.      Tue, Apr 20  Before the Bell     0.02
MTB    M&T Bank Corp         Tue, Apr 20  Before the Bell     1.38
MAT    Mattel                Tue, Apr 20  -----N/A-----       0.09
MDU    MDU Resources         Tue, Apr 20  -----N/A-----       0.28
MDCO   MEDICINES CO          Tue, Apr 20  After the Bell      0.05
MEL    Mellon Finl Corp      Tue, Apr 20  Before the Bell     0.44
MRBK   Mercantile Bankshares Tue, Apr 20  Before the Bell     0.69
MICC   Millicom Intl CellularTue, Apr 20  During the Market    N/A
MIL    Millipore Corp.       Tue, Apr 20  After the Bell      0.51
MKSI   MKS Instruments       Tue, Apr 20  After the Bell      0.23
MOT    Motorola Inc.         Tue, Apr 20  After the Bell      0.07
NCI    Navigant Consulting   Tue, Apr 20  Before the Bell     0.14
NTRS   Northern Trust        Tue, Apr 20  -----N/A-----       0.55
JNC    Nuveen Invsts, Inc.   Tue, Apr 20  Before the Bell     0.41
OSI    Outback Steakhouse    Tue, Apr 20  Before the Bell     0.64
OI     Owens Illinois        Tue, Apr 20  After the Bell      0.24
BTU    Peabody Energy Corp.  Tue, Apr 20  Before the Bell     0.28
PFE    Pfizer                Tue, Apr 20  Before the Bell     0.51
RSH    RadioShack Corp       Tue, Apr 20  Before the Bell     0.38
RGS    Regis Corp            Tue, Apr 20  Before the Bell     0.53
RG     Rogers Com Inc.       Tue, Apr 20  Before the Bell      N/A
RCN    Rogers Wireless Com   Tue, Apr 20  Before the Bell      N/A
SAFC   Safeco Corp.          Tue, Apr 20  Before the Bell     0.89
SANM   Sanmina-SCI Corp.     Tue, Apr 20  After the Bell      0.04
STX    Seagate Tech          Tue, Apr 20  After the Bell      0.07
SCSS   Select Comfort Corp   Tue, Apr 20  After the Bell      0.17
SLG    SL Green Rlty         Tue, Apr 20  After the Bell      0.83
SOV    Sovereign Bancorp     Tue, Apr 20  After the Bell      0.39
PCS    Sprint Corp           Tue, Apr 20  Before the Bell    -0.09
FON    Sprint FON Group      Tue, Apr 20  Before the Bell     0.15
STN    Station Casinos       Tue, Apr 20  Before the Bell     0.46
STK    Storage Tech          Tue, Apr 20  After the Bell      0.21
TASR   Taser Intl, Inc.      Tue, Apr 20  Before the Bell     0.22
TER    Teradyne Inc.         Tue, Apr 20  After the Bell      0.15
ALL    The Allstate Corp     Tue, Apr 20  After the Bell      1.41
CAKE   The Cheesecake FactoryTue, Apr 20  After the Bell      0.32
JOE    The St. Joe Co        Tue, Apr 20  Before the Bell     0.17
TMA    Thornburg Mortgage    Tue, Apr 20  After the Bell       N/A
TMIC   Trend Micro           Tue, Apr 20  -----N/A-----        N/A
TRI    Triad Hospitals, Inc  Tue, Apr 20  After the Bell      0.60
0TRMK   Trustmark Corp       Tue, Apr 20  -----N/A-----       0.51
TUP    Tupperware            Tue, Apr 20  After the Bell      0.21
USB    U.S. Bancorp          Tue, Apr 20  Before the Bell     0.51
UB     UnionBanCal           Tue, Apr 20  After the Bell      0.98
WHI    W Hldg Co, Inc.       Tue, Apr 20  After the Bell      0.29
WRE    Wash Rl Est Invst TrstTue, Apr 20  After the Bell      0.52
WEBX   WebEx Com, Inc.       Tue, Apr 20  After the Bell      0.21
WFC    Wells Fargo & Co      Tue, Apr 20  -----N/A-----       0.98
XTO    XTO Energy Inc.       Tue, Apr 20  Before the Bell     0.51
ZION   Zions Bancorp         Tue, Apr 20  After the Bell      1.07


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

TW     21st Century InsuranceWed, Apr 21  After the Bell      0.21
AFFX   Affymetrix            Wed, Apr 21  After the Bell     -0.08
ALB    Albemarle Corp        Wed, Apr 21  Before the Bell     0.40
ALEX   Alexander & Baldwin   Wed, Apr 21  After the Bell      0.52
ALFA   Alfa Corp             Wed, Apr 21  Before the Bell     0.25
ADS    Alliance Data Sys CorpWed, Apr 21  -----N/A-----       0.28
AGI    Alliance Gaming Corp. Wed, Apr 21  -----N/A-----       0.27
ALTR   Altera Corp           Wed, Apr 21  After the Bell      0.13
ABK    Ambac Finl Group      Wed, Apr 21  Before the Bell     1.49
DOX    Amdocs Limited        Wed, Apr 21  -----N/A-----       0.27
APPX   Am Pharm Partners, IncWed, Apr 21  -----N/A-----       0.17
AME    AMETEK Inc.           Wed, Apr 21  Before the Bell     0.34
APH    Amphenol              Wed, Apr 21  -----N/A-----       0.36
AMR    AMR Corp              Wed, Apr 21  Before the Bell    -1.05
ACI    ARCH COAL INC         Wed, Apr 21  Before the Bell     0.10
ASCL   Ascential Software    Wed, Apr 21  After the Bell      0.08
ASML   ASML Hldg NV          Wed, Apr 21  -----N/A-----       0.09
ATML   Atmel Corp            Wed, Apr 21  After the Bell      0.00
BOL    Bausch & Lomb         Wed, Apr 21  Before the Bell     0.37
BLC    Belo                  Wed, Apr 21  Before the Bell     0.17
BBI    Blockbuster Inc.      Wed, Apr 21  Before the Bell     0.37
CAI    CACI Intl             Wed, Apr 21  After the Bell      0.50
CDN    Cadence Design Sys    Wed, Apr 21  After the Bell      0.10
CWG    CanWest Global Com    Wed, Apr 21  -----N/A-----        N/A
COF    Capital One Finl Corp.Wed, Apr 21  After the Bell      1.52
CRR    CARBO Ceramics        Wed, Apr 21  Before the Bell     0.53
CERN   Cerner Corp           Wed, Apr 21  After the Bell      0.32
CEY    Certegy               Wed, Apr 21  Before the Bell     0.31
CHIR   Chiron                Wed, Apr 21  After the Bell      0.27
CHZ    Chittenden            Wed, Apr 21  After the Bell      0.49
CHH    Choice Hotels Intl IncWed, Apr 21  After the Bell      0.29
CTXS   Citrix Sys            Wed, Apr 21  After the Bell      0.18
CL     Colgate-Palmolive     Wed, Apr 21  -----N/A-----       0.59
COLT   COLT Telecom Group    Wed, Apr 21  Before the Bell      N/A
CFC    Countrywide Finl Corp Wed, Apr 21  Before the Bell     1.75
CVD    Covance               Wed, Apr 21  After the Bell      0.33
DNB    D&B                   Wed, Apr 21  After the Bell      0.62
DCN    Dana                  Wed, Apr 21  Before the Bell     0.40
EK     Eastman Kodak Co      Wed, Apr 21  Before the Bell     0.17
EBAY   eBay                  Wed, Apr 21  After the Bell      0.26
ELUX   Electrolux AB         Wed, Apr 21  -----N/A-----       1.00
EFII   Electronics Imaging   Wed, Apr 21  After the Bell      0.20
ENDP   Endo Pharms           Wed, Apr 21  Before the Bell     0.23
ERES   eResearch Tech        Wed, Apr 21  After the Bell      0.18
FFIV   F5 Networks           Wed, Apr 21  -----N/A-----       0.14
FR     1st Indl Rlty Trust   Wed, Apr 21  After the Bell      0.79
FMBI   1st Midwest Bancorp   Wed, Apr 21  Before the Bell     0.51
FLIR   FLIR Sys, Inc.        Wed, Apr 21  Before the Bell     0.31
F      Ford Motor Co         Wed, Apr 21  Before the Bell     0.44
GD     General Dynamics      Wed, Apr 21  Before the Bell     1.19
GG     Goldcorp              Wed, Apr 21  After the Bell      0.11
GXP    Great Plains Energy   Wed, Apr 21  Before the Bell     0.30
GBBK   Greater Bay Bancorp   Wed, Apr 21  Before the Bell     0.40
HET    Harrah's EntertainmentWed, Apr 21  -----N/A-----       0.66
HHS    Harte-Hanks           Wed, Apr 21  Before the Bell     0.21
HRH    Hilb Rogal & Hobbs Co Wed, Apr 21  After the Bell      0.65
HNI    HON INDUSTRIES Inc.   Wed, Apr 21  Before the Bell     0.32
HON    Honeywell             Wed, Apr 21  Before the Bell     0.30
HYSL   Hyperion              Wed, Apr 21  After the Bell      0.32
IMN    Imation Corp.         Wed, Apr 21  Before the Bell     0.55
IMO    Imperial Oil Limited  Wed, Apr 21  -----N/A-----        N/A
IFX    Infineon Tech AG      Wed, Apr 21  Before the Bell     0.04
ICST   Integrated Circuit SysWed, Apr 21  Before the Bell     0.25
ISIL   Intersil Corp         Wed, Apr 21  After the Bell      0.19
IPCR   IPC Hldg              Wed, Apr 21  Before the Bell     1.23
JPM    J.P. Morgan Chase & CoWed, Apr 21  Before the Bell     0.86
JNPR   Juniper Networks      Wed, Apr 21  After the Bell      0.08
KMI    Kinder Morgan         Wed, Apr 21  After the Bell      1.00
KLAC   KLA-Tencor            Wed, Apr 21  After the Bell      0.29
NITE   Knight Trading Group  Wed, Apr 21  Before the Bell     0.22
LF     LeapFrog Enterprises  Wed, Apr 21  After the Bell     -0.20
LEG    Leggett & Platt       Wed, Apr 21  After the Bell      0.29
MHM    Masonite Intl Corp    Wed, Apr 21  -----N/A-----       0.51
MXO    Maxtor Corp           Wed, Apr 21  After the Bell      0.12
MEDI   MedImmune             Wed, Apr 21  Before the Bell     0.42
MEOH   Methanex              Wed, Apr 21  -----N/A-----       0.35
MGG    MGM MIRAGE            Wed, Apr 21  Before the Bell     0.46
MHK    Mohawk Industries, IncWed, Apr 21  After the Bell      1.00
MPS    MPS Group             Wed, Apr 21  Before the Bell     0.05
NCEN   New Century Finl Corp Wed, Apr 21  After the Bell      1.86
NYB    New York Comm Bancorp Wed, Apr 21  Before the Bell     0.50
NSC    Norfolk Southern Corp Wed, Apr 21  Before the Bell     0.31
NCX    NOVA Chemicals        Wed, Apr 21  Before the Bell     0.04
NUS    Nu Skin               Wed, Apr 21  -----N/A-----       0.18
OO     Oakley, Inc.          Wed, Apr 21  After the Bell      0.06
PFCB   P.F. Chang's          Wed, Apr 21  Before the Bell     0.27
PTV    Pactiv                Wed, Apr 21  After the Bell      0.26
PMTC   PARAMETRIC TECH CORP  Wed, Apr 21  Before the Bell    -0.01
PENN   Penn National Gaming  Wed, Apr 21  Before the Bell     0.41
PJC    Piper Jaffray         Wed, Apr 21  Before the Bell     0.75
PNC    PNC Finl Serv Group   Wed, Apr 21  Before the Bell     0.98
PGN    Progress Energy       Wed, Apr 21  Before the Bell     0.78
PFGI   Provident Finl Group  Wed, Apr 21  -----N/A-----       0.54
QCOM   QUALCOMM Inc.         Wed, Apr 21  After the Bell      0.48
RDN    Radian Group          Wed, Apr 21  After the Bell      1.00
RCL    Ryl Crbbn Cruises Ltd Wed, Apr 21  Before the Bell     0.42
RYL    Ryland Group          Wed, Apr 21  After the Bell      1.63
SBC    SBC Com               Wed, Apr 21  Before the Bell     0.32
S      Sears, Roebuck and Co Wed, Apr 21  Before the Bell    -0.10
SSTI   Silicon Storage Tech  Wed, Apr 21  After the Bell      0.12
SIRI   Sirius Satellite RadioWed, Apr 21  -----N/A-----      -0.10
SKYF   Sky Finl Group        Wed, Apr 21  Before the Bell     0.45
SON    Sonoco Products       Wed, Apr 21  Before the Bell     0.33
SSI    SpectraSite, Inc.     Wed, Apr 21  After the Bell      0.12
STJ    St. Jude Medical, Inc Wed, Apr 21  Before the Bell     0.50
SBUX   Starbucks             Wed, Apr 21  After the Bell      0.17
STM    STMicroelectronics    Wed, Apr 21  After the Bell      0.12
SDS    SunGard Data Sys      Wed, Apr 21  After the Bell      0.30
SWFT   Swift Transportation  Wed, Apr 21  After the Bell      0.09
SY     Sybase                Wed, Apr 21  Before the Bell     0.19
TK     TK SHIPPING MARSHALL  Wed, Apr 21  After the Bell      4.23
TLTOB  Tele2 AB              Wed, Apr 21  -----N/A-----        N/A
TLAB   Tellabs               Wed, Apr 21  Before the Bell     0.00
TLS    Telstra Corp Limited  Wed, Apr 21  -----N/A-----        N/A
TEX    Terex Corp            Wed, Apr 21  After the Bell      0.36
TTEK   Tetra Tech            Wed, Apr 21  After the Bell      0.23
BK     The Bank of New York  Wed, Apr 21  Before the Bell     0.45
KO     The Coca-Cola Co      Wed, Apr 21  Before the Bell     0.43
FAF    The 1st American Corp Wed, Apr 21  Before the Bell     0.58
REY    Reynolds & Reynolds   Wed, Apr 21  Before the Bell     0.36
TBL    The Timberland Co     Wed, Apr 21  Before the Bell     0.62
TDW    Tidewater             Wed, Apr 21  Before the Bell     0.18
TMK    Torchmark             Wed, Apr 21  After the Bell      1.03
TKC    Trkcl Iltsm Hzmtlr    Wed, Apr 21  -----N/A-----        N/A
UTX    Un Tech               Wed, Apr 21  Before the Bell     1.12
WCN    Waste Connections     Wed, Apr 21  After the Bell      0.52
WFT    Weatherford Intl      Wed, Apr 21  -----N/A-----       0.37
WLP    WllPnt Hlth Ntwrks    Wed, Apr 21  After the Bell      1.58
WHR    Whirlpool Corp        Wed, Apr 21  06:00 am ET         1.38
WTNY   Whitney Hldg Corp     Wed, Apr 21  -----N/A-----       0.61
WPS    WPS Resources         Wed, Apr 21  -----N/A-----        N/A
WYE    WYETH                 Wed, Apr 21  Before the Bell     0.55
YUM    Yum! Brands, Inc.     Wed, Apr 21  After the Bell      0.45


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

AD     ADVO                  Thu, Apr 15  After the Bell      0.41
RKY    Adolph Coors, Co.     Thu, Apr 22  Before the Bell     0.15
ALGN   Align Tech            Thu, Apr 22  -----N/A-----       0.04
ALE    Allete                Thu, Apr 22  Before the Bell     0.54
AED    Allied Domecq PLC     Thu, Apr 22  Before the Bell      N/A
AT     ALLTEL Corp.          Thu, Apr 22  -----N/A-----       0.76
AMZN   Amazon.com, Inc.      Thu, Apr 22  -----N/A-----       0.19
AXP    American Express Co   Thu, Apr 22  -----N/A-----       0.62
AIG    American Intl Group   Thu, Apr 22  Before the Bell     1.06
ACF    AmeriCredit Corp.     Thu, Apr 22  After the Bell      0.28
AMGN   Amgen                 Thu, Apr 22  -----N/A-----       0.56
APA    Apache Corp           Thu, Apr 22  Before the Bell     1.06
AHG    Apria Healthcare GroupThu, Apr 22  Before the Bell     0.54
ARW    Arrow Electronics, IncThu, Apr 22  Before the Bell     0.29
ASBC   Associated Banc-Corp  Thu, Apr 22  -----N/A-----       0.76
AF     Astoria Finl Corp     Thu, Apr 22  After the Bell      0.71
T      AT&T                  Thu, Apr 22  Before the Bell     0.33
ALV    Autoliv               Thu, Apr 22  Before the Bell     0.74
ADP    Auto Data Processing  Thu, Apr 22  Before the Bell     0.50
AVCT   Avocent Corp          Thu, Apr 22  Before the Bell     0.33
ABX    Barrick Gold          Thu, Apr 22  -----N/A-----       0.07
BAX    BAXTER INTL INC       Thu, Apr 22  Before the Bell     0.31
BZH    Beazer Homes USA Inc. Thu, Apr 22  Before the Bell     3.26
BDX    Becton, Dickinson and Thu, Apr 22  Before the Bell     0.61
BLS    BellSouth Corp        Thu, Apr 22  Before the Bell     0.47
BMS    Bemis Co, Inc.        Thu, Apr 22  Before the Bell     0.35
BHE    Benchmark Electronics Thu, Apr 22  Before the Bell     0.35
BSG    BISYS GROUP INC       Thu, Apr 22  Before the Bell     0.22
BWA    BorgWarner, Inc.      Thu, Apr 22  Before the Bell     1.81
BYD    Boyd Gaming           Thu, Apr 22  After the Bell      0.29
BDN    Brandywine Rlty Trust Thu, Apr 22  After the Bell      0.63
BGG    Briggs & Stratton CorpThu, Apr 22  Before the Bell     2.30
BRCM   Broadcom              Thu, Apr 22  After the Bell      0.27
BR     Burlington Resources  Thu, Apr 22  Before the Bell     1.62
CZR    Caesars Entertainment Thu, Apr 22  -----N/A-----       0.18
ELY    Callaway Golf         Thu, Apr 22  After the Bell      0.70
CNI    Canadian Natl Railway Thu, Apr 22  -----N/A-----       0.53
CAH    Cardinal Health, Inc. Thu, Apr 22  Before the Bell     0.99
CAT    Caterpillar Inc.      Thu, Apr 22  Before the Bell     0.70
CLS    Celestica             Thu, Apr 22  After the Bell     -0.03
CELG   Celgene Corp.         Thu, Apr 22  Before the Bell     0.08
CX     CEMEX S.A.            Thu, Apr 22  -----N/A-----       0.61
CNP    CenterPoint Energy    Thu, Apr 22  -----N/A-----       0.12
CHRT   Chartered Semicon ManuThu, Apr 22  After the Bell     -0.02
CPS    ChoicePoint, Inc.     Thu, Apr 22  Before the Bell     0.36
CINF   Cincinnati Finl Corp  Thu, Apr 22  Before the Bell     0.67
CIT    CIT Group             Thu, Apr 22  Before the Bell     0.76
CBCF   Citizens Banking      Thu, Apr 22  -----N/A-----       0.40
CNX    CONSOL Energy         Thu, Apr 22  Before the Bell     0.17
ED     Consolidated Edison.  Thu, Apr 22  -----N/A-----       0.68
CBE    Cooper Industries Ltd Thu, Apr 22  Before the Bell     0.77
CTB    Cooper Tire & Rubber  Thu, Apr 22  Before the Bell     0.29
GLW    Corning               Thu, Apr 22  After the Bell      0.05
CMI    Cummins Inc.          Thu, Apr 22  Before the Bell     0.69
CYT    Cytec Industries Inc. Thu, Apr 22  After the Bell      0.59
DHR    Danaher               Thu, Apr 22  Before the Bell     0.84
ECL    Ecolab Inc.           Thu, Apr 22  Before the Bell     0.24
EW     Edwards Lifesciences  Thu, Apr 22  After the Bell      0.41
ELX    Emulex                Thu, Apr 22  After the Bell      0.25
EC     Engelhard Corp        Thu, Apr 22  Before the Bell     0.39
ELAB   Eon Labs              Thu, Apr 22  Before the Bell     0.47
EFX    Equifax Inc.          Thu, Apr 22  Before the Bell     0.37
ERIE   Erie Indemnity        Thu, Apr 22  After the Bell      0.72
FILE   FileNet               Thu, Apr 22  Before the Bell     0.09
FDC    1st Data              Thu, Apr 22  -----N/A-----       0.44
FMD    1st Marblehead        Thu, Apr 22  After the Bell     -0.06
FISV   Fiserv                Thu, Apr 22  -----N/A-----       0.44
FPL    FPL Group             Thu, Apr 22  Before the Bell     0.86
BEN    Franklin Resources    Thu, Apr 22  -----N/A-----       0.72
FULT   Fulton Finl           Thu, Apr 22  -----N/A-----       0.33
GMT    GATX Corp             Thu, Apr 22  Before the Bell     0.33
GYI    GETTY IMAGES INC      Thu, Apr 22  After the Bell      0.35
GILD   Gilead Sciences       Thu, Apr 22  -----N/A-----       0.33
GTI    GrafTech Intl Ltd     Thu, Apr 22  -----N/A-----       0.10
GLK    Great Lakes Chemical  Thu, Apr 22  -----N/A-----       0.09
GDT    Guidant               Thu, Apr 22  Before the Bell     0.56
HSC    Harsco Corp           Thu, Apr 22  Before the Bell     0.36
HCA    HCA                   Thu, Apr 22  Before the Bell     0.71
HP     Helmerich & Payne     Thu, Apr 22  -----N/A-----       0.12
HSY    Hershey Foods Corp    Thu, Apr 22  Before the Bell     0.81
IEX    Idex                  Thu, Apr 22  -----N/A-----       0.49
IDTI   Integrated Device TechThu, Apr 22  After the Bell      0.06
IGT    Intl Game Tech        Thu, Apr 22  Before the Bell     0.32
IVGN   Invitrogen Corp       Thu, Apr 22  Before the Bell     0.60
SFI    iStar Finl            Thu, Apr 22  Before the Bell      N/A
ESI    ITT Edu Serv, Inc.    Thu, Apr 22  Before the Bell     0.25
ITT    ITT Industries        Thu, Apr 22  Before the Bell     0.89
JEC    Jacobs Engineering    Thu, Apr 22  -----N/A-----       0.61
JBLU   JetBlue Airways       Thu, Apr 22  Before the Bell     0.12
K      Kellogg Co.           Thu, Apr 22  Before the Bell     0.51
KMB    Kimberly Clark        Thu, Apr 22  Before the Bell     0.91
LFL    LAN Chile             Thu, Apr 22  -----N/A-----       0.44
LYO    Lyondell PetrochemicalThu, Apr 22  Before the Bell    -0.24
MAR    Marriott Intl         Thu, Apr 22  Before the Bell     0.42
MEE    Massey Energy Co      Thu, Apr 22  After the Bell     -0.07
MYG    Maytag                Thu, Apr 22  -----N/A-----       0.53
KRB    MBNA                  Thu, Apr 22  After the Bell      0.40
MWV    MeadWestvaco          Thu, Apr 22  Before the Bell    -0.29
MENT   Mentor Graphics       Thu, Apr 22  -----N/A-----       0.06
MRK    Merck & Co., Inc.     Thu, Apr 22  Before the Bell     0.72
MERQ   Mercury Interactive   Thu, Apr 22  After the Bell      0.22
MCRL   Micrel Semicon        Thu, Apr 22  After the Bell      0.05
MCHP   Microchip Tech        Thu, Apr 22  After the Bell      0.20
MSFT   Microsoft             Thu, Apr 22  After the Bell      0.29
NTY    NBTY Inc.             Thu, Apr 22  Before the Bell     0.47
NXTL   Nextel Com            Thu, Apr 22  Before the Bell     0.44
NVS    Novartis Corp         Thu, Apr 22  -----N/A-----       0.53
NUE    Nucor                 Thu, Apr 22  Before the Bell     0.89
ODP    Office Depot Inc.     Thu, Apr 22  Before the Bell     0.36
ONB    Old National Bancorp  Thu, Apr 22  After the Bell      0.29
PSFT   PeopleSoft            Thu, Apr 22  After the Bell      0.18
PKI    PerkinElmer           Thu, Apr 22  After the Bell      0.13
PHLY   Phila Cnsldtd Hldg    Thu, Apr 22  -----N/A-----       0.94
PLCM   Polycom Incorporated  Thu, Apr 22  After the Bell      0.11
POT    Potash Corp Ssktchwn  Thu, Apr 22  -----N/A-----       0.58
PFS    Provident Finl Serv   Thu, Apr 22  After the Bell      0.15
PVN    Providian Finl Corp   Thu, Apr 22  After the Bell      0.19
DGX    Quest Diagnostics     Thu, Apr 22  Before the Bell     1.05
RBK    Reebok                Thu, Apr 22  Before the Bell     0.67
RESP   Respironics, Inc.     Thu, Apr 22  Before the Bell     0.55
RHI    Robert Half Intl      Thu, Apr 22  After the Bell      0.06
RSAS   RSA Security          Thu, Apr 22  After the Bell      0.09
TSG    Sabre Hldg Corp.      Thu, Apr 22  Before the Bell     0.33
SAP    SAP AG                Thu, Apr 22  Before the Bell     0.23
SLE    Sara Lee              Thu, Apr 22  Before the Bell     0.44
SAY    Satyam Comp Serv Lmtd Thu, Apr 22  -----N/A-----       0.19
SGP    Schering-Plough       Thu, Apr 22  Before the Bell     0.01
SGMS   Scientific Games Corp Thu, Apr 22  After the Bell      0.19
SFA    Scientific-Atlanta IncThu, Apr 22  After the Bell      0.31
POOL   SCP Pool Corp         Thu, Apr 22  Before the Bell     0.05
SRA    Serono S.A.           Thu, Apr 22  Before the Bell     0.17
SWIR   Sierra Wireless, Inc  Thu, Apr 22  After the Bell      0.13
SIAL   Sigma-Aldrich Corp    Thu, Apr 22  After the Bell      0.78
SIVB   Silicon Valley Bancsh Thu, Apr 22  After the Bell      0.34
SSD    Simpson Manu          Thu, Apr 22  After the Bell      0.54
SNA    Snap-on Incorporated  Thu, Apr 22  Before the Bell     0.29
SFG    StanCorp Finl Group   Thu, Apr 22  Before the Bell     1.32
HOT    Starwood Hotels ResortThu, Apr 22  Before the Bell     0.09
SUN    Sunoco                Thu, Apr 22  -----N/A-----       1.31
SLVN   Sylvan Learning Sys   Thu, Apr 22  Before the Bell     0.01
TKLC   Tekelec               Thu, Apr 22  After the Bell      0.08
TMX    Telefonos De Mexico   Thu, Apr 22  After the Bell      0.91
TPX    Tempur Pedic Intl     Thu, Apr 22  After the Bell      0.14
TGN    Texas Genco Hldg, Inc Thu, Apr 22  Before the Bell      N/A
TXT    Textron Inc.          Thu, Apr 22  Before the Bell     0.51
TKR    The Timken Co         Thu, Apr 22  Before the Bell     0.27
TAC    TRANSALTA CORP        Thu, Apr 22  Before the Bell      N/A
TRH    Transatlantic Hldg    Thu, Apr 22  -----N/A-----       1.46
TUES   Tuesday Morning Corp  Thu, Apr 22  Before the Bell     0.19
TLRK   Tularik Inc.          Thu, Apr 22  -----N/A-----      -0.44
UDI    Un Defense Industries Thu, Apr 22  Before the Bell     0.66
UPS    UN PARCEL SERVICE INC Thu, Apr 22  Before the Bell     0.61
URI    Un Rentals            Thu, Apr 22  Before the Bell    -0.10
UHS    Universal Health Serv Thu, Apr 22  After the Bell      0.66
UST    UST Inc.              Thu, Apr 22  Before the Bell     0.68
VCI    Valassis Com Inc.     Thu, Apr 22  Before the Bell     0.46
VLY    Valley Natl Bancorp   Thu, Apr 22  -----N/A-----       0.41
VRSN   VeriSign, Inc.        Thu, Apr 22  After the Bell      0.13
VC     Visteon Corp          Thu, Apr 22  Before the Bell     0.12
VTSS   Vitesse Semicon       Thu, Apr 22  After the Bell      0.01
WC     WellChoice, Inc.      Thu, Apr 22  After the Bell      0.68
WEN    Wendy's Intl          Thu, Apr 22  -----N/A-----       0.43
WSTC   West Corp             Thu, Apr 22  -----N/A-----       0.37
WDC    Western Digital Corp. Thu, Apr 22  After the Bell      0.21
XLNX   Xilinx, Inc.          Thu, Apr 22  -----N/A-----       0.25
YELL   Yellow Roadway Corp   Thu, Apr 22  After the Bell      0.33
YRK    York Intl Corp.       Thu, Apr 22  Before the Bell    -0.14

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

ABY    Abitibi-Consolidated  Fri, Apr 23  -----N/A-----        N/A
ARM    ArvinMeritor, Inc.    Fri, Apr 23  Before the Bell     0.42
BVN    Co Minas Buenaventura Fri, Apr 23  After the Bell      0.43
ERICY  Ericsson LM Telephone Fri, Apr 23  -----N/A-----       0.14
FO     Fortune Brands        Fri, Apr 23  -----N/A-----       0.82
IP     Intl Paper Co.        Fri, Apr 23  Before the Bell     0.14
KB     Kookmin Bank          Fri, Apr 23  -----N/A-----        N/A
LZ     Lubrizol              Fri, Apr 23  Before the Bell     0.53
HCR    Manor Care Inc        Fri, Apr 23  Before the Bell     0.44
NJ     Nidec                 Fri, Apr 23  -----N/A-----        N/A
OXY    Occidental Petroleum  Fri, Apr 23  Before the Bell     1.22
PCBC   Pacific Capital BncorpFri, Apr 23  Before the Bell     1.20
PGL    Peoples Energy Corp.  Fri, Apr 23  Before the Bell     1.52
PRGO   Perrigo               Fri, Apr 23  Before the Bell     0.19
SCG    SCANA                 Fri, Apr 23  Before the Bell     0.78
SLB    Schlumberger          Fri, Apr 23  Before the Bell     0.47
SII    Smith Intl, Inc.      Fri, Apr 23  Before the Bell     0.42
SSCC   Smurfit-Stone Cont    Fri, Apr 23  -----N/A-----      -0.23
STE    Steris                Fri, Apr 23  Before the Bell     0.43
SYNT   Syntel, Inc.          Fri, Apr 23  Before the Bell     0.21
TRP    TransCanada Corp      Fri, Apr 23  -----N/A-----        N/A
VOLVY  Volvo AB              Fri, Apr 23  -----N/A-----       0.30
WY     Weyerhaeuser Co.      Fri, Apr 23  Before the Bell     0.56
XRX    Xerox Corp            Fri, Apr 23  Before the Bell     0.15


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

Symbol  Co Name              Ratio    Payable     Executable


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
ARO     Aeropostale, Inc          3:2      Apr  26th   Apr  27th
BKST    Brookstone, Inc           3:2      Apr  26th   Apr  27th
NSSC    NAPCO Security Systems    2:1      Apr  27th   Apr  28th
OMTL    Omtool, Ltd               2:1      Apr  27th   Apr  28th
UCBI    United Community Banks    3:2      Apr  28th   Apr  29th
TASR    TASER Intl                2:1      Apr  29th   Apr  30th
TCBK    TriCo Bancshares          2:1      Apr  30th   May   3rd


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

Earnings season will be in full swing this week and we do mean
full.  There parade of corporate reports is overwhelming.  Plus,
the markets will get to hear from Alan Greenspan twice as he
speaks before congress.


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

----------------
Monday, 04/19/04
----------------
Leading Indicators (DM)    Mar  Forecast:    0.3%  Previous:     0.0%
Semi Book-to-Bill numbers

-----------------
Tuesday, 04/20/04
-----------------
Fed governor Alan Greenspan before the Senate
Fed governor Pianalto makes an appearance
Chain Store Sales
Redbook Retail Sales



-------------------
Wednesday, 04/21/04
-------------------
Fed governor Alan Greenspan before Joint Economic Committee
Fed's Beige Book (DM)
Crude Oil & Gasoline inventories

------------------
Thursday, 04/22/04
------------------
Initial Claims (BB)      04/17  Forecast:     N/A  Previous:     360K
Natural Gas inventories
Fed governor Bies makes an appearance
Fed governor Bernanke makes an appearance

----------------
Friday, 04/23/04
----------------
Durable Orders (BB)        Mar  Forecast:    0.7%  Previous:     2.5%


To Be Announced:
PPI (BB) DATE TBA          Mar  Forecast:    0.3%  Previous:     0.1%
Core PPI (BB) DATE TBA     Mar  Forecast:    0.1%  Previous:     0.1%


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 04-18-2004
Sunday                                                      2 of 5

In Section Two:

Watch List: A handful of bullish candidates
Dropped Calls: None
Dropped Puts: None


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

A handful of bullish candidates

___________________________________________________________________

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.
___________________________________________________________________


Best Buy Co - BBY - close: 53.00 change: +1.35

WHAT TO WATCH: Earnings were March 31st for BBY and the stock
gapped higher over resistance at $50.00 and its 200-dma after
beating estimates by 3 cents per share.  The rally continued
until it faded under resistance at $54-$55.  The consolidation
pulled back toward the $50 level, now support, and we're seeing
traders buy the dip.  We feel it's a bit early to go long and
traders are probably better off waiting for BBY to breakout over
the $55.00 mark.

Chart=


---

Avid Technology - AVID - close: 50.63 change: +5.19

WHAT TO WATCH: AVID beat earnings estimate by 8 cents when it
reported on Thursday night.  Investors rewarded the stock with an
11% gain on volume four times the norm.  We like the breakout
over resistance at $50.00 and its 200-dma but traders probably
want to look for a dip and a bounce from $48.00-48.50 before you
consider any bullish positions.  The $55 level would be a good
target.

Chart=


---

ONYX Pharmaceuticals - ONXX - close: 43.25 change: +0.95

WHAT TO WATCH: ONXX has turned in an absolutely incredible run
from its lows in February 2003.  It continues to out perform its
biotech brethren and the pull back to round-number support near
$40.00 could be a bullish entry point.  Earnings should be in May
but we can't confirm that.  A stop loss under $40.00 might work
well.  If you're feeling conservative use a trigger over $44.40
to go long.

Chart=


---

Urban Outfitters - URBN - close: 47.81 change: +2.27

WHAT TO WATCH: URBN is a retail apparel play that has been pretty
consistent with its bullish march higher.  Traders have been
buying dips to its 50-dma for months.  The company just had its
earnings estimates raised by Piper Jaffray and the stock surged
from psychological support at $45.00 and technical support at its
50-dma (again).  We'd probably target a move to $52.50 over the
next four weeks.

Chart=



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

JP $54.65 +0.42 - The strong bullish trend and the very
consistent support at its 50-dma makes this one look pretty
tempting with the dip back to support.  It might be a decent
covered-call candidate.

DHR $96.05 +0.83 - The recent consolidation near the $95 level
appears to be ending and DHR looks poised to run toward the $100
level and beyond but earnings should be on April 22nd.

ENR $48.10 +1.45 - Have you got the bunny inside?  ENR certainly
looks energized the last two sessions.  The stock is breaking out
to new highs with its MACD producing a new buy signal.  Earnings
should be April 28th.

BCR $99.00 +0.36 - We like the action in shares of BCR and think
it could be a worthy bullish candidate on a breakout over $100
but earnings should come out on April 20th.

LOGI $47.10 +1.12 - Volume is very light on this stock and that
makes us cautious but bulls could try for a run back toward its
highs on a breakout above $48.00.

CRR $66.61 +2.56 - The MACD buy signal, the P&F buy signal, the
new closing high over resistance at $66.00.  This looks pretty
good but earnings are due out on April 21st.


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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
^^^^^

None


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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The Option Investor Newsletter                   Sunday 04-18-2004
Sunday                                                      3 of 5

In Section Three:

Current Calls: CAT, EBAY, ESRX, PDCO, WFMI, ZBRA
New Calls: AET, BEC
Current Put Plays: LEH, PD, QLGC, UTSI
New Puts: AMG


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

Caterpillar - CAT - close: 81.97 change: +1.17 stop: 79.99

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:
Time is running out for our bullish play in Dow component CAT.  
Throughout the recent market volatility shares of CAT pulled back 
to support at the $80.00 level and the small bounce on Friday 
actually looks like a potential bullish entry point.  However, 
CAT is due to announce earnings on Thursday morning, April 22nd.  
We are not going to hold over the event so that means we'll be 
closing the play on Tuesday or Wednesday evening.  Hopefully, the 
markets just needed some more time to consolidate its gains from 
the March low rebound and we'll see some strength next week.  In 
the news CAT and the Auto Works Union (UAW) extended their 
contract again, this time to April 25th, so union members can 
look over the latest offer from CAT.  

Suggested Options:
We are not suggesting any new positions this close to CAT's 
earnings report.

Annotated Chart:

 

Picked on April 02 at $ 80.25
Change since picked:   + 1.72
Earnings Date        04/22/04 (confirmed)
Average Daily Volume:     2.5 million  
Chart =


---

eBay Inc - EBAY - close: 74.86 change: -0.50 stop: 73.80*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:
Time is almost up for our bullish EBAY play as well.  We were 
planning on a pre-earnings run up and the strength over the last 
couple of weeks has been great.  Unfortunately, EBAY's recent 
bounce from its simple 10-dma was stunted on Friday when Internet 
advertising company DoubleClick issued a sour earnings report on 
Thursday night.  Shares of DCLK dropped 25% on Friday and acted 
as a wet blanket for the INX Internet index, which fell 3.5%.  

EBAY is due to report its Q1 earnings on Wednesday, April 21st 
after the closing bell.  That means we'll be planning on an exit 
either Tuesday night or Wednesday right before the closing 
depending on how EBAY performs.  This close to earnings we do not 
suggest any new bullish positions.  We're going to raise our stop 
to Wednesday's low at $73.80.

Suggested Options:
We are not suggesting any new bullish positions this close to 
EBAY's earnings report.

Annotated chart:

 


Picked on April 01 at $ 72.25
Change since picked:   + 2.61
Earnings Date        04/21/04 (confirmed)
Average Daily Volume:     7.0 million    
Chart =


---

Express Scripts - ESRX - close: 77.22 change: +1.21 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 that kept the faith got a shot at a solid entry point 
into our ESRX play last week as the stock dipped to strong 
support near $75 and rebounded from there to close out the week 
above $77.  Ever since tagging new all-time highs a couple weeks 
ago, the stock has been tracing out what looks like a bull flag 
continuation pattern above the recent breakout level.  Note how 
the $78 level has been providing resistance over the past week.  
A breakout back over that level will have the stock moving 
through the top of its flag pattern and another breakout to new 
highs won't be far behind.  Support at $75 is growing stronger 
now, with the 20-dma at $75.27 and the 30-dma at $74.91.  
Aggressive traders can target entries on one more dip and rebound 
near that level early next week, but the more likely scenario is 
that we're going to see a breakout entry setup as ESRX pushes to 
new highs above $78.60.  Recall our initial target was for a move 
to the $80 level, with an outside shot at a push still higher.  
We are running out of time on this play though, as earnings are 
set to be released on April 28th.  Clearly we'll be dropping the 
play ahead of that report, hopefully at significantly higher 
levels.  Maintain stops at $74.

Suggested Options:
Aggressive 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.  Note that we haven't listed any longer-duration 
options, as we'll be closing the play before earnings, which are 
less than 2 weeks away.

BUY CALL MAY-75*XTQ-EO OI=2152 at $4.40 SL=2.75
BUY CALL MAY-80 XTQ-EP OI=1035 at $1.75 SL=0.75

Annotated Chart of ESRX:

 

Picked on April 4th at       $75.36
Change since picked:          +1.86
Earnings Date                4/28/04 (unconfirmed)
Average Daily Volume =     1.03 mln
Chart =


---

Patterson Dental Co - PDCO - cls: 78.62 chg: +0.81 stop: 77.35*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:
Too bad all our plays aren't this easy.  PDCO's breakout over 
major resistance at $70.00 was fueled on strong volume and the 
stock shot from $70 to $75 in a short time while bucking weakness 
in the broader market.  Then PDCO consolidated those gains in a 
tight sideways trading pattern before launching higher on 
Wednesday.  Volume has once again been above average on the 
rallies.  We've been cinching up our stop losses the last few 
days to try and protect a good chunk of the move higher.  Our 
original play description suggested that traders plan to take 
profits when PDCO traded into the $77.50-80.00 range.  It hit 
$77.49 on Wednesday and has continued to climb higher.  We have 
since set an official exit point at $79.95 and we will close the 
play if PDCO can trade there or above.  In the meantime we're 
going to raise our stop loss to $77.35, just under Friday's low.  
In the news PDCO announced that it has already completed its 
ProVet acquisition.

Suggested Options:
This close to our planned exit point we are not suggesting new 
bullish positions.  

Annotated Chart:

 

Picked on April 04 at $ 72.14
Change since picked:   + 6.48
Earnings Date        02/19/04 (confirmed)
Average Daily Volume:     493 thousand   
Chart =


---

Whole Foods Market - WFMI - cls: 76.91 chng: +0.90 stp: 
73.40*new*

Company Description:
Whole Foods Market, Inc. owns and operates a chain of natural and 
organic foods supermarkets in the United States.  As of September 
28, 2003, it operated 145 stores in 26 states, the District of 
Columbia and Canada.  Regional distribution centers, bakehouse 
facilities, commissary kitchens, seafood processing facilities, 
produce procurement centers and a coffee roasting operation 
support the Company's stores.  WFMI's product selection has a 
heavy emphasis on perishable foods designed to appeal to both 
natural foods and gourmet shoppers.  Its product categories 
include, but are not limited to, produce, seafood, grocery, meat 
and poultry, bakery, prepared foods and catering, specialty 
(beer, wine and cheese), whole body (nutritional supplements, 
vitamins, body care and educational products such as books), 
floral, pet products and household products.

Why we like it:
It looks like we initiated coverage on WFMI just in the nick of 
time, as the stock delivered the breakout we were looking for on 
Friday.  We needed to see a breakout over $76.50 to satisfy our 
entry trigger and that move arrived in the middle of the day, as 
the stock surged above $77 on solid volume.  Holding most of 
those gains right into the closing bell, the stock has cleanly 
broken both horizontal resistance and the descending trendline 
and now looks poised to run up and challenge the March highs just 
over $79.  Traders that missed the breakout entry on Friday can 
now look for a slight pullback near $76 or even enter near 
current levels.  Once through the March highs, look for a 
continued rally to the $83-84 area ahead of earnings in the first 
week of May.  Following Friday's breakout, support should now be 
rock-solid at $74, so it should be safe to raise our stop to 
$73.40, just under last Wednesday's intraday low.

Suggested Options:
Shorter Term: The May $75 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 $80 
Call, while the more conservative approach will be to use the 
August 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 ahead of earnings.  

BUY CALL MAY-75*FMQ-EO OI= 613 at $4.10 SL=2.50
BUY CALL MAY-80 FMQ-EP OI= 678 at $1.65 SL=0.75
BUY CALL AUG-80 FMQ-HP OI= 303 at $3.40 SL=1.75

Annotated Chart of WFMI:

 

Picked on April 15th at      $76.01
Change since picked:          +0.90
Earnings Date               5/05/04 (confirmed)
Average Daily Volume =        686 K


---

Zebra Technologies - ZBRA - cls: 71.96 chg: +0.35 stop: 69.99

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:
News has been quiet for ZBRA but we still feel that this is a 
stock to watch for the RFID rollout that will be coming over the 
next couple of years.  Short-term we're a little disappointed to 
see the stock pull back under the $73.50 level but the dip toward 
$70 may actually be a more attractive entry point.  Some of 
ZBRA's technical oscillators look a little bearish so 
conservative traders may want to wait for the bounce back above 
$73.50.  Fortunately, Friday's candlestick looks like a small 
"hammer", which is normally a clue to a bullish reversal at the 
end of a downtrend.  Of course the downtrend is only three days 
old but hopefully that's enough!  No change in our stop at $69.99 
and no change in our target range of $77.50 to $80.00.

Keep in mind we only have a week and a half left before ZBRA's 
earnings on the 28th.  

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.

BUY CALL MAY 70 ZBQ-EN OI=434 at $4.20 SL=2.10
BUY CALL MAY 75 ZBQ-EO OI=226 at $1.80 SL=0.95

Annotated Chart:

 

Picked on April 11 at $ 73.26
Change since picked:   - 1.30
Earnings Date        04/28/04 (unconfirmed)
Average Daily Volume:     332 thousand   
Chart =



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

Aetna Inc. - AET - close: 87.40 change: +1.66 stop: 83.50

Company Description:
Aetna Inc. is a provider of healthcare, dental, pharmacy, group 
life, disability and long-term care benefits in the United 
States, serving approximately 13 million medical members, 10.9 
million dental members, 7.4 million pharmacy members and 12.3 
million group insurance customers as of December 31, 2003.  The 
company has a nationwide provider network of more than 600,000 
healthcare services providers, including over 362,000 primary 
care and specialty physicians and 3,626 hospitals.  Its 
operations include three business segments: Healthcare, Group 
Insurance and Large Case Pensions.  Healthcare consists of health 
and dental plans offered on both a risk basis and an employer-
funded basis.  The Group Insurance segment includes group life 
insurance products offered on a risk basis.  Large Case Pensions 
manages a variety of retirement products primarily for defined 
benefit and defined contribution plans.

Why we like it:
After breaking out to new highs in early January, shares of AET 
have been on a tear, reaching a new all-time high of $95 earlier 
this month before some much-needed profit taking appeared.  The 
stock plunged last week, falling back to support near $85, just 
over the 50-dma ($83.58) and the buyers reappeared in volume on 
Friday, sending the stock back up by nearly 2%.  This isn't a 
play for the timid, as we're going to go with the still-bullish 
trend and look for a run into the company's earnings report, 
which is less than 2 weeks away.  Normally, we wouldn't try to 
pick a bottom in a stock that has fallen so sharply and so 
recently, but the rebound from the $85 level looks very 
encouraging and odds are good that investors will drive the stock 
higher ahead of the quarterly report in anticipation of another 
blowout earnings performance like the company delivered in 
February.

While the PnF chart is still bullish, the fact that the bullish 
price objective of $89 was already met (and exceeded) does make 
this a higher risk play.  We'd like to see a mild dip back near 
the $86 level early next week to provide a better entry point, 
but may have to content ourselves with entering on further 
strength as AET pushes back over the $88 level.  Look for 
resistance to be found on the way back up at the 20-dma ($89.73) 
and then again at the 10-dma ($91.57).  Since we're looking for a 
strong run into earnings (scheduled for April 29th), we'll target 
a rally back to the $95 level ahead of that report.  Because of 
the higher risk associated with this play, we're going to use a 
tight stop at $84.50, just under Thursday's intraday low.  If AET 
breaks below there, then want to let it go.

Suggested Options:
Aggressive traders can use the May $90 Call, while the more 
conservative approach will be to use the May $85 strike.  Our 
preferred option is the May $85 strike, as it is currently in the 
money and should provide sufficient time for the play to move in 
our favor.  Note that we have listed a July strike, but going 
that route may be too conservative since we'll be closing the 
play ahead of earnings, which are less than 2 weeks away.

BUY CALL MAY-85*AET-EQ OI= 1026 at $5.10 SL=3.00
BUY CALL MAY-90 AET-ER OI=  417 at $2.30 SL=1.25
BUY CALL JUL-90 AET-GR OI=15845 at $4.10 SL=2.50

Annotated Chart of AET:

 

Picked on April 18th at      $87.40
Change since picked:          +0.00
Earnings Date               4/29/04 (confirmed)
Average Daily Volume =     1.52 mln
Chart =


---

Beckman Coulter - BEC - cls: 56.16 chg: +1.04 stop: 53.99

Company Description:
Beckman Coulter, Inc. is a leading manufacturer of biomedical 
testing instrument systems, tests and supplies that simplify and 
automate laboratory processes. Spanning the biomedical testing 
continuum -- from systems biology and clinical research to 
laboratory diagnostics and point-of-care testing -- Beckman 
Coulter's 200,000 installed systems provide essential biomedical 
information to enhance health care around the world. The company, 
based in Fullerton, Calif., reported 2003 annual sales of $2.2 
billion with 64 percent of this amount generated by recurring 
revenue from supplies, test kits and services.
(source: company press release)

Why We Like It:
We're adding BEC to the call play list based on its bullish 
technical picture.  The stock has a very nice longer-term rising 
trend.  This bullish picture is also supported on BEC's point-
and-figure chart, which points to a $90.00 price target.  Short-
term we think BEC can trade to the $60 level and possibly higher.  
Driving the bullish breakout on Friday was news that BEC had just 
signed some three-year agreements with Premier, Inc. worth $130 
million a year in revenues for BEC.  

We're going to suggest plays at current levels although a dip 
back to the $55 level would be an attractive entry point as well.  
The stock has held support near the $54 mark for several days so 
we'll start the play with a stop loss at $53.99.  Our short-term 
target is $60.00.

Suggested Options:
This is a short-term play before BEC reports earnings in early 
May so we don't see a need to buy the longer-term calls.  The May 
strikes should work fine.  Our favorite is the May 55s.

BUY CALL MAY 50 BEC-EJ OI=2017 at $6.70 SL=4.75
BUY CALL MAY 55*BEC-EK OI= 905 at $2.50 SL=1.25

Annotated Chart:

 

Picked on April 18 at $ 56.16
Change since picked:   + 0.00
Earnings Date        05/03/04 (unconfirmed)
Average Daily Volume:     333 thousand   
Chart =



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CURRENT PUT PLAYS
*****************

Lehman Brothers - LEH - close: 79.21 change: +1.72 stop: 80.00

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:
Friday's rebound in the Brokerage sector (XBD.X) was not what we 
wanted to see, and the fact that LEH went along for the ride is 
doubly discouraging.  Following the breakdown under $80, the 
stock dropped as low as $76 before beginning its oversold rebound 
and we noted on Thursday the potential for a rally back to test 
its breakdown level.  Due to that risk, we suggested conservative 
traders use a tighter stop just over $78 and it looks like that 
was good advice based on the strong rally on Friday.  If there's 
any hope of the stock reaching our downside target near the 200-
dma, then LEH should find resistance at the 10-dma ($79.96), 
which should encounter price action near the $79.50 level on 
Monday.  Should the stock continue its rebound (which appears to 
be the more likely scenario at this point), then we'll accept the 
pain of exiting the play at breakeven.  Only aggressive traders 
should consider new entries on a rollover below resistance, as it 
looks like the tide has shifted in favor of the bulls over the 
near term.

Suggested Options:
Aggressive short-term traders will want to use the May $75 put, 
while the more conservative approach will be to use the May 80 
put.  Our preferred option is the May 80 strike, as it is 
currently in the money and should provide ample time for the play 
to move in our favor.

BUY PUT MAY-80*LES-QP OI=1703 at $3.20 SL=1.50
BUY PUT MAY-75 LES-QO OI=3206 at $1.25 SL=0.60

Annotated Chart of LEH:

 

Picked on April 6th at        $81.77
Change since picked:           -2.56
Earnings Date                3/16/04 (confirmed)
Average Daily Volume =      2.32 mln
Chart =


---

Phelps Dodge - PD - close: 75.10 chg: +1.55 stop: 77.51

Company Description:
Phelps Dodge Corp. is the world's second-largest producer of 
copper, a world leader in the production of molybdenum, the 
largest producer of molybdenum-based chemicals and continuous-
cast copper rod, and among the leading producers of magnet wire 
and carbon black. The company and its two divisions, Phelps Dodge 
Mining Co. and Phelps Dodge Industries, employ more than 13,000 
people in 27 countries. (source: company press release)

Why We Like It:
We added PD to the put list based on its bearish technical 
picture.  Copper prices, while off their highs, were still very 
long-term overbought and PD had broken several support levels.  
Both copper and PD continued to trade lower midweek and on huge 
volume for PD.  Yet both managed to bounce on Friday.  Oversold 
bounce or reversal?  We're betting on the former.  However, we 
would like to state that our fundamental outlook on PD and copper 
is long-term bullish.  The expanding global economies have driven 
up demand for the metal and demand is not likely to subside any 
time soon. 

On Thursday we suggested that traders could use a failed rally 
toward $75 or $76 as a potential bearish entry point for new 
positions.  Now we've got the bounce but we need to see it roll 
over.  Earnings are a week and a half away and we don't plan to 
hold over the event.

Suggested Options:
With such a short time frame given PD's earnings report our 
favorite puts are the May strikes.  Even though they're at-the-
money strikes the May 75's will probably work well.

BUY PUT MAY 80 PD-QP OI= 627 at $6.90 SL=4.50
BUY PUT MAY 75 PD-QO OI=2499 at $3.90 SL=1.95
BUY PUT MAY 70 PD-QN OI=5876 at $1.95 SL=0.95 

Annotated Chart:

 

Picked on April 13 at $ 75.15
Change since picked:   - 0.05
Earnings Date        04/28/04 (confirmed)
Average Daily Volume:     2.3 million    
Chart =


---

QLogic Corp. - QLGC - close: 28.80 change: -1.25 stop: 31.50*new*

Company Description:
QLogic Corporation designs and develops storage networking 
infrastructure components sold to original equipment 
manufacturers (OEMs), resellers and system integrators.  The 
company's products include the SANblade host bus adapters (HBAs), 
SANbox Fibre Channel Switches and SANsurfer Management Suite HBA 
and Switch management software.  QLGC's Fibre Channel HBAs 
support small computer systems interface (SCSI) protocol, 
Internet protocol (IP), virtual interface (VI) and fiber 
connection (FICON) protocol.  In addition, the company designs 
and supplies controller chips used in hard drives and tape 
drives, as well as enclosure management and baseboard management 
chip solutions that monitor the health of the physical 
environment within a server or storage enclosure.

Why we like it:
We suspected that once QLGC broke its $31 support level, the pain 
level would begin to increase for the bulls, and that certainly 
seems to be the way things are playing out.  After Thursday's 
drop to $30, the stock lost another 4% on Friday, closing at its 
worst level in well over a year.  And with volume on the rise and 
the stock ending the day at its low, it doesn't look like the 
downtrend is going to end anytime soon.  The $31 level should 
have now transformed itself into strong resistance and any 
rebound into the $30-31 area should be viewed as a continuation 
entry point.  Traders that jumped into the play on the initial 
breakdown likely got the best possible entry point, as the stock 
hasn't looked back since and appears to be picking up speed.  
Following a more than 10% drop in the past week, it is hard to 
justify new momentum entries at current levels until we get some 
semblance of an oversold rebound.  Lower stops to $31.50 this 
weekend, which is just above the 10-dma ($31.39).

Suggested Options:
Aggressive short-term traders can use the May 27 Put, while the 
more conservative approach will be to use the May 30 strike.  Our 
preferred option is the May 30 strike, as it is in the money and 
should provide ample time for the play to move in our favor.

BUY PUT MAY-30 QLC-QF OI=4584 at $2.40 SL=1.25
BUY PUT MAY-27*QLC-QY OI=1068 at $1.10 SL=0.50

Annotated Chart of QLGC:

 

Picked on April 13th at       $31.00
Change since picked:           -2.20
Earnings Date                4/28/04 (confirmed)
Average Daily Volume =      4.61 mln
Chart =


---

UTStarcom, Inc. - UTSI - cls: 27.69 chng: +0.06 stop: 29.50*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 long-awaited breakdown in shares of UTSI finally occurred on 
Wednesday and as expected, this breakdown was for real.  The 
stock plunged through $28 and then actually probed the $27 level 
on both Thursday and Friday before settling out just above that 
level.  With support now cleanly broken, our focus turns to the 
next likely level of support near $26.  That is the next level 
likely to produce a meaningful bounce before UTSI heads down 
towards our $24 target.  The company is scheduled to report 
earnings on the 27th of April, so time is growing short.  There 
is probably just enough time for one more round of entries on the 
next failed rebound in the $28.50-29.00 area.  Aggressive traders 
can enter on a break below Friday's low, but need to watch for a 
potential bounce from the $26 area.  Lower stops to $29.50 this 
weekend.

Suggested Options:
Aggressive short-term traders can use the May 25 Put, while the 
more conservative approach will be to use the May 30 strike.  Our 
preferred option is the May 30 strike, as it is in the money and 
should provide ample time for the play to move in our favor.

BUY PUT MAY-30*UON-QF OI=8751 at $3.40 SL=1.75
BUY PUT MAY-25 UON-QE OI=3491 at $0.80 SL=0.40

Annotated Chart of UTSI:

 

Picked on March 30th at       $29.38
Change since picked:           -1.69
Earnings Date                4/27/04 (confirmed)
Average Daily Volume =      3.11 mln
Chart =



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

Affiliated Mgrs Grp. - AMG - cls: 52.91 chng: -0.07 stop: 56.00

Company Description:
Affiliated Managers Group, Inc. is an asset management company 
with equity investments in a diverse group of mid-sized 
investment management firms (the Affiliates).  As of December 31, 
2002, the Company's affiliated investment management firms 
managed approximately $70.8 billion in assets across a range of 
investment styles and in three principal distribution channels: 
High Net Worth, Mutual Fund and Institutional.  In its 
investments in Affiliates, it typically holds a majority equity 
interest in each firm, with the remaining equity interests 
retained by the management of the Affiliate.  The company's 
investment approach addresses the succession and ownership 
transition issues facing the founders and principal owners of 
many medium-sized investment management firms by allowing them to 
preserve their firm's entrepreneurial culture and independence 
and to continue to participate in their firm's success.

Why we like it:
Investors in AMG had an enjoyable ride from the January lows near 
$46 up to the $58 area, but after the recent bearish price 
action, it looks like it is time to pay the piper.  After failing 
to rally back to the area of its prior highs earlier this month, 
the stock broke down hard last week, pressured by the weakness in 
the rest of the Financial sector on fears of rising interest 
rates.  The stock finally found some support at the 100-dma 
($52.14) over the past 2 sessions and managed to recover to close 
back on top of the 38% retracement ($52.54) of the rally from the 
November low on Friday.  But that rebound came too late to 
prevent more damage on the PnF chart, which issued a new Sell 
signal with the trade at $53, reinforcing the prior Sell signal.  
While the bearish price target is only $49, the price action 
suggests that we could see substantially more price weakness 
ahead of the company's earnings report on April 28th.

Of course, with the 62% retracement ($48.62), the 200-dma 
($48.46) and next horizontal support coming in at $48, looking 
for a substantial break below $49 may be a bit too optimistic.  
While aggressive traders can use a breakdown under the 100-dma to 
trigger bearish entries, our preference is to enter on a failed 
rebound near the $54 level, which should serve as strong 
resistance.  Regardless of the entry strategy chosen, traders 
should keep in mind that this is a more aggressive trade, simply 
due to the nearness of earnings, which are now less than 2 weeks 
away.  We want to give the stock room to rebound and allow us 
entry on the rollover, so we're setting a generous stop at $56, 
just over the 50-dma ($55.90).  We'll look to exit the play on a 
drop to touch $49, which will hopefully come next week, well in 
advance of the company's earnings report.

Suggested Options:
Aggressive short-term traders can use the May 50 Put, while the 
more conservative approach will be to use the May 55 strike.  Our 
preferred option is the May 55 strike, as it is in the money and 
should provide ample time for the play to move in our favor.

BUY PUT MAY-55*AMG-QJ OI= 60 at $2.95 SL=1.50
BUY PUT MAY-50 AMG-QK OI=100 at $0.60 SL=0.30

Annotated Chart of AMG:

 
Picked on April 18th at       $52.91
Change since picked:           +0.00
Earnings Date                4/28/04 (unconfirmed)
Average Daily Volume =         561 K
Chart =



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The Option Investor Newsletter                   Sunday 04-18-2004
Sunday                                                      4 of 5

In Section Four:

Leaps:
Option Spreads: This Week Has Been A Real Trip – May CPTI
    Positions
Traders Corner: Floating the Turnover - Part Deux
Traders Corner: Adapting To Change - One More Time


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*****
LEAPS
*****

Complacency Still Reigns
By Mark Phillips
mphillips@OptionInvestor.com

For all the earnings-driven volatility over the past week, you
would think that we'd see some sort of uptick in the volatility
indices, but that certainly wasn't the case.  Oh sure, there was a
bit of a move up mid-week, but by Friday's close, the VIX was
back, under 15, the VXO was back under 16 and the VXN was lurking
near the 22 level.  For all intents and purposes, these measures
of market volatility are back near their multi-year lows.  There's
no doubt that fear of the downside has yet to really make an
appearance.

While earnings news has certainly taken center stage (and will
likely remain there for another couple weeks), what seems to be
the dominant factor in expectations for the market going forward
is that interest rates will be rising due to inflation beginning
to rear its ugly head.  Already, some of the Fed heads have been
making statements to calm those fears, pointing out that more data
points from the various economic indicators before the Fed will
even consider changing its extremely accommodative monetary
stance.  With a veritable parade of Fed governors set to take to
the speaking circuit next week, we can expect them to continue
trying to cool fears of rising rates.  Of course, the bond
vigilantes have already placed their bets and if the action in the
bond market over the past 2 weeks is any indication, it is (like I
said 2 weeks ago) only a matter of time before interest rates
begin to climb.

Whether it is in June, August or later really isn't the issue, as
the initial rate increases can be expected to be small and spaced
as far apart as possible.  Greenspan won't want to burst any of
the asset bubbles that are currently in place ahead of the
election, so I would be surprised to see more than a 25 bp hike
prior to November.  A token increase like that will do very little
to affect the investment landscape for equities.  As we move into
the end of the year and into 2005 though, I think we can expect
significant rate hikes to try to put a damper on what we can now
see is strengthening inflation.

We got the latest data point on that front from the CPI report
last week, which came in much stronger than expected at 0.5%.
Doing the math, we can see that lines up with an annual rate of
6%, which is solid confirmation of what came out from the PPI
report a couple months ago, showing inflation ticking along at a
7.2% annual rate.  The market is a forward-looking mechanism and
with a strong showing from both PPI and CPI in recent months, bond
investors have clearly seen the light and knocked the price of the
30-Year Bond off its lofty pedestal up near 116 down to last
week's low of 107.  That's a whale of a drop and it corresponds to
the interest rate on the long bond rising from soaring from 4.6%
to above 5.2%.  That is not a trivial move, with the downtrend in
yields from August through March now decisively broken.  The next
key level will be for the yield to challenge the summer highs near
5.5% and if we see a move through that level, then I think it will
be clear that no matter what we've heard from the Fed, we can
conclude the rate hike process is underway.

Of course, this is all being driven by very few data points from
the monthly economic reports and I would have to agree with the
assessment of the Fed here -- we need to see more data to confirm
that the high readings we've recently received in the form of the
CPI and PPI are not aberrations.  Based on what I've seen across
the board in the price of raw materials, I do think we're seeing
real inflation leap into the economy, but that will only be
confirmed by more data points showing an inflationary trend.

The reality that rising interest rates are on the horizon hasn't
been lost on the equity market, and despite the DOW and S&P
indices holding up fairly well, the NASDAQ looks to be in trouble,
led lower by the weakening Semiconductor index.  By Friday's
close, the SOX is closing in on the $475 support level again and
the NASDAQ Composite closed back under 2000.  That certainly sets
the stage for another drop towards critical support near 1900.  It
will be interesting to see what develops on the next drop, as a
trade at 1900 would break the 200-dma this time around.

Pulling up our PnF chart of the COMPX, we can see that last week's
drop gave us a fresh Sell signal and a tentative price target of -
- you guessed it -- 1900!  Each 10-point drop in the index that
occurs without a 3-box reversal will have the target dropping by
20 points.  So if we were to drop straight down to 1900 from here
(perish the thought), that would equate to a bearish PnF price
target of 1700, a level we last visited back in August of 2003.
The Bullish Percent chart of the COMPX certainly confirms the
downside potential, with a big Sell signal putting the index into
Bear Confirmed status at roughly 61%.  Except in very special
circumstances, being long Technology stocks right now does now
seem like a wise move.

The S&P 500 is looking a bit better, as at least it hasn't given a
Sell signal.  With the recent rise into a column of X though, the
stage is set for a powerful Sell signal if the bears are able to
pressure the index below the 1080 level.  From the current level,
that would give us a minimum downside objective of 1000.  Once
again, that's not a pretty picture, as it would drop the SPX back
to levels not seen since last September and would constitute a
major breakdown under the 200-dma, which we haven't even visited
for a year.  The Bullish Percent chart also confirms the bearish
condition as the recent drop to the 72% level puts this index in
Bear Confirmed status as well.

The anomaly in this bearish parade -- believe it or not -- comes
in the form of the DOW.  The picture we see there is most
interesting indeed.  Take a look at the PnF chart of the DOW and
you can see why I've been reticent to initiate a play on this
index in either direction.  We recently had a Sell signal with a
price target of 9400.  That was never approached before we got a
Buy signal with a target of 11,600.  Obviously we never got
anywhere near there before last week's new Sell signal, now with a
tentative target of 10,100.  My thoughts of a rangebound market
for the near to intermediate-term seems likely to come to
fruition, and the standard scale INDU PnF chart is creating more
confusion than it's worth.

So just for grins (and a little bit of sanity) I pulled up a PnF
chart with a 100-point box size.  Now that looks meaningful.  The
DOW is still on a Buy signal, with a target of 10,600, which has
already been met.  It will take a breakout over 10,800 to generate
a confirming bullish signal and a breakdown under 10,000 to give
us a new Sell signal.  That gives the DOW an 800 point range it
can meander around in through the summer doldrums without really
picking a direction.  Like I said last week, we're likely to be in
a very finicky stock-picker's market for the next few months.  The
best that can be seen ahead was already priced into the overall
market and now we'll see some of those expectations deflated in
the weeks and months ahead as investors begin to price in the risk
of rising interest rates, trying to guess how soon and how much.

There's one last piece of data on the DOW that I find most
intriguing and that's the Bullish Percent chart.  After giving a
Bear Confirmed signal by only one box when it dropped down to the
78% level, the BP chart has reversed sharply higher, ending the
week at 90% in Bear Correction status.  Should we see push above
94%, that would actually have the DOW back in Bull Confirmed.  I
think that's unlikely, but it is a risk that bears need to be
aware of.

After perusing the different scale on the DOW which removed the
recent reversals of fortune, I decided to go back and choose a
different box size on the COMPX.  Instead of the normal 10-point
box size, I doubled the scale, just like I did on the DOW.  Now
that chart really speaks volumes, as the March drop stopped right
at the bullish support line and reversed sharply higher.  But what
really catches my attention is that the rally stopped just shy of
giving a fresh PnF Buy signal at the 2080 level and price has now
reversed back into a column of O's.  More interesting still is the
fact that the bearish price objective is 1900, the same as on the
standard scale chart.

So what are we to make of all this?  My interpretation is that we
can expect volatile and confusing oscillations between key support
and resistance for the major indices, without a definitive break
unless there is a major unexpected exogenous event like another
major terrorist attack in the United States.  Specifically, that
means the DOW should meander between 10,000-10,800 the SPX should
bounce between 1080-1160 and the COMPX should bounce around
between 1900-2060, quite possibly for the next several months.  In
fact, it is entirely possible that we'll see these ranges hold
right into the November election.

What that means for us is that we need to be more discriminating
than ever in choosing our long-term trades.  We'll need to pick
the right plays, be very picky about our entry points and then
aggressively harvest gains when the trend we're in has run its
course.  With that said, let's dive into our list of plays, as
there was a lot of action this week that we need to cover.

Portfolio:

NEM - Precious metals stocks have really taken it on the chin over
the past couple weeks and it has driven our NEM play right down to
key support in the process.  NEM broke down through its 50-dma,
its short term rising trendline (now at $42.65) and all the way to
$42 before a bounce materialized just above the 200-dma ($41.89).
The stock did manage a rebound into the end of the week, but
clearly the bullish outlook is in danger.  The price of gold has
come down to once again test the $400 level and the XAU even broke
its 200-dma in its test of key support near $94, issuing a PnF
Sell signal in the process.  NEM is holding just above our stop at
$41, and a break below that level will be our final signal to drop
the play.  Until then, we'll hope for the bulls to prevail, as it
becomes understood that the fears of rising interest rates
diminishing the attractiveness of gold are overblown.  In fact, if
we do acknowledge we're in an inflationary environment and
interest rates do kick significantly higher, that would also be
quite bullish for gold in the long run.  While gold has been
falling in terms of the dollar, we are seeing the yellow metal
rising in terms of other currencies like the Euro and the Yen.
Recall that a breakout relative to these other currencies is what
we're looking for to kick off the next leg of the bull market in
gold, so all hope is not lost yet.  Maintain stops where they are
for now.

HD - More directionless slop was what last week had to offer, at
least as it relates to our HD play.  Sure the stock acted a bit
weak mid-week, but as has become the norm, it bounced right back
into the end of the week.  There's nothing to be done here but sit
and wait for resolution of this dull pattern.

MLNM - I actually thought I'd be writing a drop for MLNM this
weekend, with the stock acting poorly throughout the past week.
But miraculously, the bulls stepped in and bought the dip to
support on Friday, keeping the stock in play.  I'm turning more
negative by the week on this play, but at the same time, I'm
willing to ride it to the bitter end.  Our stop is at the right
place at $16, just under the 200-dma and right at the PnF bullish
support line.  Hopefully we'll see a more concerted rally off this
support test, maybe even enough to turn the PnF chart bullish
again.  Hey, I can hope, can't I?  That would take a rally back to
the $19 level to get the job done, and we'll probably need the BTK
index to cooperate with another run back towards the $560 level.

CHK - We noted last week that CHK looked ready to break out to new
multi-year highs and the bulls certainly gave it an honest effort.
The stock managed an intraday push as high as $14.15 on Friday,
closing right at $14 for a new closing high.  That continued
strength is impressive, especially in light of the pullback and in
the price of natural gas last week, and with the company's
earnings report just over a week away.  Hopefully we'll see this
tenuous breakout solidified with some further upside progress
ahead of the company's earnings report in just over a week.  Note
that I've raised the stop to $12 this weekend.  The stock has put
in two convincing rebounds from just above that level in recent
months and I really wouldn't feel good about still being in the
position if that level is broken on any post-earnings weakness.

LUV - We shouldn't have expected LUV to simply soar higher,
especially not with the price of Crude moving too new highs again
last week.  To its credit, the stock has been holding up fairly
well after rallying to the $15 level.  But it looks like the 100-
dma is a bit too strong of a resistance level, at least on the
first attempt.  We can expect price to retrace back near the 50-
dma ($14.29) and then make another bullish attempt.  We should
probably be thankful that last week's earnings report didn't have
an appreciable impact on the stock and that should mean the
underlying technicals will reign, along with the typical bullish
trend in Airline stocks heading into the busy summer travel
season.  Maintain stops where they are for now.

EBAY - For all the weakness in Technology stocks last week, EBAY
held up remarkably well.  Clearly the breakout over the $70 level
is very much intact and I had to laugh as I was preparing to write
this update.  I actually ran across some commentary that talked
about the "breakdown" in the stock last week.  Really??  Less than
a $3 drop from all time highs and not even a 3-box reversal on the
PnF chart?  EBAY is even finding support at its 10-dma!  That
said, next week is fraught with peril, as EBAY is set to report
earnings.  We ought to expect another bullish report from
management, but as we've seen already, investors are in a "Sell
first, ask questions later" mood and there is the distinct
possibility that a "Sell the News" event could unfold.  For that
reason, I'll suggest that conservative traders may just want to
harvest gains and avoid the risk of holding over the announcement.
We'll maintain our position with our stop at $70 and hope for
enough good news with the announcement for another injection of
bullish enthusiasm.

Watch List:

TYC - It's hard to make a case for a bullish play when the stock
gets mired in such a long-term consolidation pattern.  Sure we can
guess that the pattern will break to the upside, but that's little
more than an educated guess, supported by the PnF chart.  TYC
still looks bullish as it holds within its rising channel and
above the 100-dma.  That's bullish.  But note how the last tow
rally attempts have stalled at the middle of the channel and that
implies a weakening trend.  I'm content to let the play stagnate
of the Watch List for the time being, at least until the weekly
Stochastics get closer to oversold territory.  Then we might have
something in terms of an attractive entry point.

Radar Screen:

APA - Well, I said we'd dump this potential play if it broke out
without us and that's precisely what happened last week as the
stock soared through resistance to new highs.  That's the nature
of what's happening in the Natural Gas sector right now
unfortunately APA never really afforded us a viable point at which
to enter the bullish trend.  Better luck next time.

GM - Anybody want to take a bet on whether GM is going to bounce
here?  It certainly looks like it wants to on the daily chart, as
support is holding firm near $45, just above the 200-dma.  With
Stochastics and MACD on the weekly chart, I certainly wouldn't
want to bet against a near-term upward move.  But our long-term
bearish view is still very much intact.  We'll just watch and wait
as price moves back up to the top of the falling channel and then
we'll look to "Get Shorty!"

DJX - As noted above, I think the DOW has now entered a protracted
consolidation phase, where it's likely that we'll be trapped in
this range for the next several months.  That means there's
nothing productive to be gained by trying to take long-term
positions.  I'm dropping the DJX as a play candidate this weekend.

EK - Still trolling along near the $25 support level, it looks
like EK is getting ready to make its next rally attempt.  I find
it interesting that the removal from the DOW has had little impact
on the stock, showing just how out of favor the stock has been,
currently is and it will remain so for some time to come,
punctuated by those brief, explosive upward moves.  We simply want
to capture the next one of those, but it is still quite a ways
away.  That said, we can probably now expect EK to trade sideways
to up, as weekly Stochastics are now trying to turn bullish.

AIG - AIG still looks great to me as a long-term position, and I
liked last week's consolidation price action.  But I just can't
bring myself to make a move prior to the company's earnings
report.  There have been some wild price moves following earnings
reports this time around and not all of them have been favorable.
Let's wait one more week and add the stock to our Watch List
officially next weekend -- that is, provided the response to
earnings doesn't change the overall picture.

Closing Thoughts:
What?  Another week with no new plays.  You got that right and
quite honestly I'm feeling pretty good about that.  We're in the
heart of earnings season and there are all sorts of violent
gyrations taking place as expectations are brought into line with
reality.  This is NOT the time to be adding new long-term plays,
but it IS the time to be making observations so that once the
volatility dies down we can pick another play or two that are
likely to benefit through the quarter ahead (and hopefully
beyond).

With the VIX now back under 15, there is clearly very little fear
of the downside.  At the same time, we can see that the bullish
percent readings are giving us mixed signals, despite some
technically weak-looking index charts.  Range-bound slop is what
we're currently seeing and quite honestly, I don't expect that to
change in the next couple weeks.  Let's stick with what's working
and be very selective about what we allow into our Portfolio.

Have a great week!

Mark


LEAPS Portfolio

Current Open Plays



LEAPS Watchlist

Current Possibles

SYMBOL  SINCE    TARGET PRICE  TARGETED LEAP  SYMBOL

CALLS:
TYC    03/07/04   $27          JAN-2005 $ 30  ZPA-AF
                            CC JAN-2005 $ 25  ZPA-AE
                               JAN-2006 $ 30  WPA-AF
                            CC JAN-2006 $ 25  WPA-AE
                            PP JUL-2004 $ 25  TYC-SE



PUTS:
None



New Portfolio Plays

None

New Watchlist Plays

None


Drops

SNDK $27.91 Now THAT was unpleasant.  After soaring nearly $7 from
our entry point, shares of SNDK got annihilated following the
disappointing earnings report Wednesday night.  And the situation
only got worse following competitor LEXR's dismal outlook Thursday
night.  This is the danger of holding ANY position over an
earnings announcement, and the primary reason I suggested
conservative traders just harvest their gains ahead of the
earnings report.  Fortunately, despite the precipitous drop, SNDK
did allow us to exit at our $28 stop on Thursday, resulting in a
nominal breakeven on the play.  Not the result I was hoping for,
but at least we didn't get hurt.  If this had been a short-term
trade, there's no question we would have taken our exit ahead of
the report.  But it's rather counter-productive to be jumping in
and out of long-term plays every earnings cycle.  The negative
news on pricing pressures in the flash memory industry suggests
that SNDK will be under pressure for a while.  But we'll keep our
eye on it just in case it comes back to life.


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This Week Has Been A Real Trip – May CPTI Positions
By Mike Parnos, Investing With Attitude

It's been a trying week.  I'm currently on a cruise ship a long
long way from home.  They advertised wine, women and song – and
they delivered.  All are essentials for most people for a great
trip.  But something is missing – something very important.

No, not cable TV, but that's a good guess.  Yes, I do miss my
couch, but I adapt pretty easily.  What is missing is the
Internet.  It's uncanny how dependent we can become and how we can
take it for granted.  From ten minutes out of port, the ship's
Internet didn't work – and I was trapped.

Talk about withdrawal.  I feel like a need to be fed stock and
option quotes intravenously to get back to normal (whatever that
is).

I'm writing this from a little hole in the wall in Puerta
Vallerta.  Their Internet connection is slower than dial-up – if
that's possible.   It's truly painful.  The sacrifices I make . .

As of this writing, our April CPTI positions look pretty good.
One more day to go.  We could be staring at a very profitable
April.



Looking Ahead To May
Let's see what we can dream up for May.  Remember, May is a five-
week option cycle.  There may be a little more premium available,
but that comes with an extra week of exposure.

May Position #1 – SPX Iron Condor – 1128.83
Sell 10 SPX May 1080 puts
Buy 10 SPX May 1070 puts
Credit: $1.90 ($1,900)

Sell 7 SPX May 1175 calls
Buy 7 SPX May 1190 calls
Credit: $1.40 ($980)
Total net credit and potential profit of: $2,880.  Range: 1080 to
1175.  Maintenance: $10,500.

May Position #2 – RUT Iron Condor -
Sell 10 RUT May 620 calls
Buy 10 RUT May 630 calls
Credit: $1.20 ($1,200)

Sell 10 RUT May 540 puts
Buy 10 RUT May 530 puts
Credit: $1.30 ($1,300)
Total net credit and profit potential of $2,500.  Range: 540 to
620.  Maintenance: $10,000.

May Position #3 – MNX Iron Condor - $145.94
Sell 10 MNX May $152.50 calls
Buy 10 MNX May $157.50 calls
Credit: $.80 ($800)

Sell 10 MNX May $140 puts
Buy 10 MNX May $135 puts
Credit: $.95 ($950)
Total net credit and profit potential of $1,750.  Range: $140 to
$152.50.
Maintenance $5,000

May Position #4 – BBH Iron Condor - $145.88
This seems to be a pretty safe play.  I know BBH has a tendency to
be volatile.  It's bitten us in the butt more than once, but
here's a 20-point range you may find attractive.
Sell 10 BBH May $155 calls
Buy 10 BBH May $165 calls
Credit: $.70 ($700)

Sell 10 BBH May $135 puts
Buy 10 BBH May $125 puts
Credit: $.70 ($700)
Total net credit and profit potential of $1.40 x 10 contracts =
$1,400.  Range: $135 to $155.  Maintenance: $10,000.


ONGOING POSITIONS

QQQ ITM Strangle - $36.15
Refer to my most recent column for the position details.  But we
had the April $34 calls and the $37 April puts.   We rolled them
out to the May $34 calls and the May $37 puts for a total of $.80
or $800.

Next month it will probably be time to roll out our LEAPS to 2006.

OSX Calendar Spread - $105.33
We are currently short the May 110 calls and long the June 115
calls.  Our cost basis is only $.20.  On Friday, aggressive
traders should also sell the May $100/$95 bull put spread for a
credit of $.95.  That will bring our cost basis to a positive
$.70.

___________________________________________________________

APRIL CPTI POSITIONS
I have limited time and resources here in Mexico.  So, I suggest
you refer to my previous column for the other April positions.  If
we're lucky, they will all expire worthless tomorrow and you'll
never have to look at them again.  Besides, you'll be too busy
counting your profits.


TTFN
I'm not sure if I will be near an Internet portal on Saturday or
if the ship's Internet will be prepared by then.  So, if the
monthly wrap-up doesn't appear on Sunday, it should be in the
Monday newsletter.

Just remember that all of our posted positions are hypothetical
and educational.  If you don't know what you're doing, stay the
hell out of the market or you'll lose the family jewels – and you
only get a limited number of family jewels.



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

Floating the Turnover - Part Deux
Jane Fox

I have seen so many different ways of interpreting markets I
truly didn't think there were any ways left and if there were
they were so far out in left field that they didn’t have any
relevancy. At least that was way I though until I ran across the
Float Turnover Channel.

The Float Turnover Channel is a unique and inventive way using a
stocks float to calculate a channel from which you can see
distribution or accumulation.   Float Analysis definition is: by
adding up volume cumulatively and comparing it to the number of
shares actually available for trading (the float), we can see
areas on a chart where the stock goes through a change of
ownership. We can see where the Smart Money is accumulating at
the bottom and we can see were they get out at the top. But we
have already been through all this in my previous article called
"Floating the Turnover."

What I promised in this article was some examples of the Float
Turnover Channel and how to apply Float Analysis to them.

The first chart I would like to show you is of Novastar Financial
(NFI). Novastar is a REIT, Real Estate Investment Trust, so I
figured would be susceptible to interest rate hikes or the
possibility of them.




Here is NFI with the Float Turnover Channel on April 2nd. It came
off its high with very high volume, made a small bounce and then
got hit a second time to the downside again on heavy volume. I
will draw blue line at the bottom channel because this channel
changes each day and I want you to see where it was. The magenta
lines show where the channel had been also.




Here is NFI on April 5th. It crashed through its lower float
turnover channel line and appears to have made a top. If this is
the case, it will likely move higher for a few days and stall at
its 50% float channel line (the middle magenta line) or the blue
line I have drawn.

Lets advance three more days to April 8th.



Notice how the channel has moved with each day but my blue line
shows where it "used" to be and where you would expect price to
retrace. It was at this point that I bought a put.




Oh my goodness, the only thing I have to think about now is when
do I take profits. This, of course, was out of the ordinary but I
thought an excellent example of how to use Float Analysis.

Let's look at another example, Glamis Gold (GLG). From June to
November 2003 GLG traded from $10.00 to $15.00 but on November
12th if broke out with volume.




From November 12th to November 17th GLG tests the original
channel line and then on the 18th it takes another jump to 16.47.




Here is GLG on December 2nd for a 20% rise.



Let's look at another example. From October to January, the
markets experienced a very nice upward move but we all knew it
had to come to an end at some point, or at least come to a rest.
On January 20th the SOX index made a lower high giving us an idea
that lower prices may be in the making and time to start looking
for Semiconductor short candidates. You didn't have to look far.

Here is a semiconductor Lam Research (LRCX) on January 23rd. LRCX
has not given us a sell signal yet but I would be watching it.




On January 24th LRCX breaks out of its Float Turnover Channel
with volume. By February 19th LRCX has revisited the breakout
point and was headed down again. If you were an aggressive trader
you could have shorted at this point but that could have been
tricky. It would have been better if you waited until it broke
the low on February 24th at 25.50. LRCS subsequent lows were
22.50 for a 12% move.





Well I have thrown a lot at you in one article but I hope you can
see how well this analysis can work. There are other refinements
that can be added but I think this is enough for now.

Remember plan your trade and trade your plan.

Jane Fox


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

Adapting To Change - One More Time
by Mark Phillips
mphillips@OptionInvestor.com

It may seem like only a few weeks ago, but it was actually more
than four months ago that we last spoke about the necessity of
rolling with the punches and being willing to make major changes
to our trading plan, if mandated by fundamental changes in the
character of the market.  We began that process of discovery,
first with a frank discussion showing why I felt the ES had become
essentially untradable on a consistent basis.  We then extended
our analysis to show how and why the NQ was a more forgiving
contract for intraday traders looking to ride the major swings
during the session.

It is still my position that the ES is a tough horse to ride,
primarily due to the frequent and frequently opposing program
trades that have become prevalent enough in recent months to
relegate that market to the domain of agile scalpers.  Oh sure,
there are days like this past Tuesday where it's pretty easy to
hitch a ride on the trend of the day and make a pretty penny.
Where the problem comes in is trying to guess which 1 or 2 days
out of ten will provide that trend and then stay out of the other
8 or 9 which will chop up the intraday trend trader.  While the NQ
is significantly better in terms of trending behavior and program
trade driven spikes, it still has a lot of problems in those
arenas, which means a fair number of false signals.

One of my key beliefs in the current market is that this erratic
behavior in the market will continue until we see the VIX make a
sustained move over the 20-22 area.  That little wiggle up into
the 20-22 area last month won't cut it -- we need to see the VIX
return to its historically normal (at least over the last few
years) range before we'll be able to rely on a market consistently
moving through a large enough intraday range for us to routinely
capture 10 ES and 20 NQ point moves with a relatively small number
of whipsaw moves in between.

Alright, that's the gist of what we discussed in the prior two
installments and I don't want to belabor the point here.  If you
missed the articles the first time around or you'd like a more
comprehensive review, I invite you to peruse those articles to
your heart's content.  Here are the links:

Adapting To Change
http://www.OptionInvestor.com/futurescorner/fc_111903_01.asp

Adapting To Change - Part II
http://www.OptionInvestor.com/futurescorner/fc_120303_01.asp

Now we've got some new material to cover!  I've been playing
around with the Russell e-mini (MR02M = June Contract) lately and
I'm sure those of you frequenting the Futures Monitor have noticed
that symbol getting a fair amount of airtime.  There's always a
bit of mystique and apprehension whenever we begin trading a new
symbol, primarily because of the familiarity we've developed with
the symbol we've previously been trading.  But profitable trading
is NOT about being in the comfort zone!  In reality, making the
jump from one e-mini contract to another is not that big a deal.
Sure the margin requirements are a bit different, the $/point will
vary, and the character of the new market will have its own little
wrinkles.  But for the most part, the tools and lessons learned on
the ES or NQ can be applied quite easily to the MR contract.

We may have to tweak this tool a little bit here or modify a
setting here, but in most cases, our trading strategy should
translate easily to a new symbol.  In fact, the fewer changes
necessary, the better.  That gives us a good feel for how robust
our chosen trading strategy is.  In order to maintain consistency,
we're going to look at the MR contract using the same technical
setup we used in our prior analysis on the ES and the NQ.  I want
to make sure everyone understands I'm not representing this simple
oscillator setup as a great system for trading any of the e-mini
contracts.  What we've done though is established a baseline
against which the performance of each contract RELATIVE TO THAT
TRADING APPROACH can be measured.

So let's dive right in and see what the MR contract has to offer.
Please note that the initial margin required ($1750) for one
contract is roughly the same as the margin required for
controlling either the NQ ($1875) or the ES ($2000) contracts.
But with each point on the MR contract worth $100, we clearly have
more bang for our buck here (i.e. more leverage) per point of
movement than on either the ES or NQ.  Looking at the action
across the three contracts, we can see that Tuesday's big slide
down had the MR sliding from a high of 602 to a low of 582 for a
total range of 20 points.  Compare that to the 22.5 point range
for the ES and the 34 point range for the NQ, and it's easy to
make the argument that our MR contract gives the biggest moves in
terms of dollars.  Just to put it in black and white, Tuesday's
move in the MR was equivalent to $2000, in the ES it was
equivalent to $1175 and in the NQ, roughly $680.  If margin
requirements are roughly the same, I hope you can see where it
makes sense to focus on the MR contract simply on the basis of
potential gain.

This past Tuesday was what I call an easy day.  A monotonic trend
throughout the day with virtually zero false signals to whip us in
and out of positions throughout the day.  Regardless of which
contract we end up trading, all we had to do on Tuesday was remain
on the right side of the intraday trend, which was quite clearly
down.  If that wasn't clear to you, then may I suggest you
incorporate some market breadth studies in your toolbox?  As I've
written before, my personal choice is the difference between
Advancing and Declining Volume or ADVDECV.NY and ADVDECV.NQ in
Qcharts.  I haven't shown those here, but pull up a 2- or 5-minute
chart of either indicator from Tuesday and you'll see that there
was no way to make an argument for anything but weakness from
about 10-15 minutes after the open all the way to the closing
bell.

As simple as trend determination was on Tuesday, I think it will
prove instructive to compare the signals given on that day for our
5/10-minute chart montage for each of the symbols and see how each
of them stack up.  Ready?  Let's start with the ES.

5/10 Minute Chart Montage of the ES from Tuesday, April 13th



It wasn't rocket science to short the classic gap and crap setup
on Tuesday, especially once the opening gap was filled.  Using the
Stochastics settings above, we can see that clear Sell signals
were there on both the 5- and 10-minute timeframes shortly after
the open.  It should have been easy to get a fill in the 1145-1147
area.  Just hold it all the way down to the low of the day or take
a very easy 10 points off the table by the middle of the day.
Note that I've shown where the Stochastics Buy signals were, but
we knew to ignore those because of the breadth readings from the
ADVDECV indicators, right?

5/10 Minute Chart Montage of the NQ from Tuesday, April 13th



We have an almost identical picture here on the NQ.  Short the
classic setup with confirming Sell signals on the Stochastics
oscillator and an entry in the 1495-1500 area should have been
easy.  What's different here is that we got secondary entry points
near 1487-88 near the noon hour and even a third (albeit
aggressive) opportunity around 1:30 pm ET as price dropped through
the 1485 level for the last time of the day.

5/10 Minute Chart Montage of the MR from Tuesday, April 13th



Now the picture is much the same here, but I thing probably the
cleanest and easiest to play of the three contracts.  The initial
Sell signal could have been filled in the 597-598 area, which was
good for a quick drop to the 590 area.  Either close the play
there or let it ride.  The second short entry looked almost as
clean as the first.  Note how much smoother the oscillators are on
the MR than either the ES or the NQ?  Note also how smooth the
price action is as well.  This is the key factor that really makes
the MR look attractive -- fewer whipsaws.

Alright, that was an easy example and I showed it the way I did
for a couple of reasons.  First off, I wanted to show that no
matter which contract we were trading on Tuesday, it should have
been a reasonably painless process to harvest a solid gain.  But
more importantly, I hope you can see the progression from ES
(noisiest) to MR (smoothest) in terms of what is more easily
tradable.

Now let's up the ante and throw a difficult session into the mix
and see if the MR contract still comes out on top.  In order to
make our charts easier to read and annotate, we're going to
dispense with the dual timeframe charts and just use the 10-minute
chart.  It's not a change in method -- we're just doing it for
readability.  Note that on the following examples, we're willing
to consider both the long and the short side, because the ADVDECV
breadth indicator is not giving us the strong bias that it did on
Tuesday.

10-Minute Chart of the ES for April 14th and 15th



That's a lot of chopping around for two days, so it ought to
provide plenty of challenges for the active day trader, don't you
think?  Let's see what we can find.  Note that I labeled the first
Stochs Buy signal as "Ignore" as it's a short-cycle reversal in
the first hour of the day.  I've found these to be unreliable
signals or else the type that force me to chase a runaway move.

I've just listed the Buy and Sell signals on the chart and I think
the notations should be self-explanatory -- Red for Sell and Green
for Buy.  Rather than discuss each one, let's just list the
results in summary form so we can compare to the NQ and MR later
on.  For the sake of consistency, let's assume we enter each day
flat and after the first trade is entered, we're following a
reversing system.  What I mean by that is that in the chart above,
we're flat until S1, then short until B1, which we ride right into
the close for an exit near 1129.  On the following morning we are
flat again until S2, then short until B2, long until S3, short
until B3 and then long until the close.  Make sense?

S1 - Short @ 1131, exit at 1124 -- Gain = 7 points
B1 - Long @ 1124, exit at 1129 -- Gain = 5 points
S2 - Short @ 1129, exit at 1126 (chart marked wrong) -- Gain = 3
points
B2 - Long @ 1126, exit at 1125 -- Gain = 1 point
S3 - Short @ 1125, exit at 1122 -- Gain = 3 points
B3 - Long @ 1122, exit at 1127 -- Gain = 5 points

Note that we haven't addressed the issue of stops for this
analysis and that's deliberately omitted.  For the sake of
discussion here, we're assuming an "always in" system during the
day, so that one position is exited as the next is entered.  I'm
not saying this is a good way to trade, but it does aid in the
process of doing objective analysis.

So where does our tally end up?  At the end of two pretty choppy
days, this approach would have netted 24 points before trade costs
and slippage are factored in.  Six trades for 24 points or an
average of 4 points per trade.  At $50 per point, that gives us a
gain of $1200 per contract ($200 per trade).  Not great, but not
bad.  Sure it's idealized, but that's the nature of analysis.

Now let's take a look at the NQ and see how it stacks up.

10-Minute Chart of the NQ for April 14th and 15th



There's no need for discussion, other than to point out that the
oscillators are substantially noisier here and The effect can be
seen in several trades that didn't go our way.  Here's the
results.  While I didn't point it out, note that there's the
potential for another short trade entry on the little blip up and
back down between S3 and S4.  Also, I neglected to annotate what
should have been another long signal just prior to S4, which
clearly would have been another loser, to the tune of 2-3 points.

S1 - Short @ 1482, exit at 1479 -- Gain = 3 points
B1 - Long @ 1479, exit at 1474 -- Loss = 5 points
S2 - Short @ 1474, exit at 1472 -- Gain = 3 points
B2 - Long @ 1472, exit at 1482 -- Gain = 10 points
S3 - Short @ 1477, exit at 1457 -- Gain = 20 points
S4 - Short @ 1462, exit at 1457 -- Gain = 5 points
B3 - Long @ 1457, exit at 1463 -- Gain = 6 points

Tallying it all up and adding in the missing long trade just prior
to S4 (loss of 3 points), we get a grand total of 39 points in 8
trades, for roughly 5 points per trade (rounding up).  At $20 per
point, that would make the NQ good for just under $800 per
contract in two days (roughly $100 per trade), prior to
transaction costs and slippage.

10-Minute Chart of the MR for April 14th and 15th



Finally we come to the meat of the matter, the analysis of the
contract that we think (hope) will be shown to be the most
friendly to intraday traders.  Let's take a look at the results
and see how she stacks up against the ES and NQ.  Note that we've
also labeled that first short-cycle reversal on Stochastics as
"Ignore" just like we did on the ES.

S1 - Short @ 586, exit at 579 -- Gain = 7 points
Note: S1b is simply shown as a second entry point for S1
B1 - Long @ 578, exit at 582 -- Gain = 4 points
S2 - Short @ 582, exit at 577 -- Gain = 5 points
B2 - Long @ 577, exit at 578 -- Gain = 1 point
S3 - Short @ 578, exit at 575 -- Gain = 3 points
B3 - Long @ 575, exit at 579 -- Gain = 4 points

Well for starters, we don't have any losers here, although B2 was
close.  In six trades, the MR contract offers up 26 points of
gains in 6 trades for an average of 4.33 points per trade.  At
$100 per point, the MR clearly comes out on top with a total gain
of $2400 per contract ($433 per trade) prior to transaction costs
and slippage.  So just on a bang for the buck basis, we would
clearly have a preference for trading the MR over ES and NQ.  More
importantly though, I invite you to take another look at each of
those last three charts.  Which one(s) has the cleanest looking
oscillator signals?  Which one has the ugliest oscillator signals?
Now take a look at the actual price action on those charts.  Once
again, I'd certainly prefer to be trading the MR, as it has the
least "spiki-ness" on the price action, which we see directly
translated to the smoothness in the oscillators.

Sure there will be false signals and certainly we could probably
find days where this approach to trading the MR contract would get
beaten up pretty badly.  But if we're going to engage in intraday
trading in the e-minis, I think it's a fair conclusion that the MR
contract is currently the most friendly to technical traders like
me.

I hope you found this as interesting and useful as I did!
Questions are always welcome!

Mark


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The Option Investor Newsletter                   Sunday 04-18-2004
Sunday                                                      5 of 5

In Section Five:

Covered Calls: Conservative Stock Ownership: Covered Calls
Spreads and Straddles: A Market Without Conviction...
Premium-Selling Plays: Naked Puts & Calls


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*******************************************
CONSERVATIVE STOCK OWNERSHIP: COVERED-CALLS
*******************************************

Many investors find that writing "in-the-money" covered-calls
fits their criteria for a conservative, easy-to-manage options
strategy.
__________________________________________________________________

SUMMARY OF PREVIOUS CANDIDATES

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.

Note:  Margin not used in calculations.

Stock   Price   Last    Option     Price   Gain  Potential
Symbol  Picked  Price   Series     Sold   /Loss  Mon. Yield

ADCT     2.66    2.82  APR  2.50   0.30    0.14*    6.4%
LGND    18.84   21.71  APR 17.50   2.00    0.66*    4.3%
NANX     9.01    8.85  APR  7.50   1.75    0.24*    3.6%
AKS      5.45    6.09  APR  5.00   0.60    0.15*    3.4%
ROXI     5.19    4.60  APR  5.00   0.55   (0.04)    0.0%
ABMD     7.81   11.29  APR  7.50   0.75    0.44*    6.8%
TELK    28.08   27.33  APR 25.00   3.80    0.72*    3.2%

* Stock price is above the sold strike price.

Editor's Comments:

Roxio (NASDAQ:ROXI) was a "loser" this month, however traders
who like the outlook for the issue might consider selling the
MAY-$5 Call ($0.25 X $0.35) to further reduce the cost basis
in the issue.

Positions Previously Closed: None

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NEW COVERED-CALL CANDIDATES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The following group of issues is a list of potential candidates
to supplement your search for profitable trading positions.  As
with any investment, you must decide if the selections meet your
criteria for potential plays.  Only you can know what strategies
and positions are suitable for your experience level, risk-reward
tolerance and portfolio outlook.
__________________________________________________________________

Sequenced by Target Yield (monthly basis)

Stock   Last   Option    Option  Last   Open   Cost  Days Target
Symbol Price   Series    Symbol  Bid    Int.   Basis Exp. Yield

GNTA   11.34  MAY  7.50  GJU EU  4.50  10,585   6.84  33   8.9%
CLZR   15.84  MAY 15.00  UKZ EC  1.90  2,123   13.94  33   7.0%
ANDW   20.02  MAY 20.00  AQN ED  1.35  496     18.67  33   6.6%
FCEL   19.44  MAY 17.50  FQG ET  2.80  786     16.64  33   4.8%
NSTK   13.61  MAY 12.50  QUH EV  1.70  17      11.91  33   4.6%
ENDP   24.61  MAY 22.50  IUK EX  3.10  1,576   21.51  33   4.2%
MGAM   24.01  MAY 22.50  QMG EX  2.45  267     21.56  33   4.0%
SAPE    6.25  MAY  5.00  SQC EA  1.45  40       4.80  33   3.8%
MXWL   16.27  MAY 15.00  QMW EC  1.80  94      14.47  33   3.4%
ASTE   16.40  MAY 15.00  QYA EC  1.90  10      14.50  33   3.2%


Legend (for play description below)

LB-Last Bid price,
OI-Open Interest,
CB-Cost Basis or break-even point,
DE-Days to Expiry,
TY-Target Yield (monthly basis).

__________________________________________________________________

GNTA - Genta  $11.34  *** Genasense Speculation Only! ***

Genta Incorporated (NASDAQ:GNTA) is a biopharmaceutical company
with a diversified product portfolio that is focused on delivering
innovative products for the treatment of patients with cancer.  The
company's research platform is anchored by two major programs that
center on oligonucleotides (RNA/DNA-based medicines) and small
molecules.  Genasense (oblimersen sodium), the firm's lead compound
from its oligonucleotide program, is being developed with Aventis
and is currently undergoing late-stage, Phase 3 clinical testing.
The leading drug product in Genta's small molecule program is
Ganite (gallium nitrate injection), which is for treatment of
cancer-related hypercalcemia that is resistant to hydration.

MAY-7.50 GJU EU LB=4.50 OI=10,585 CB=6.84 DE=33 TY=8.9%


__________________________________________________________________

CLZR - Candela  $15.84  *** Strong Sector! ***

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.  Quarterly earnings are due April 27, 2004.

MAY-15.00 UKZ EC LB=1.90 OI=2,123 CB=13.94 DE=33 TY=7.0%


__________________________________________________________________

ANDW - Andrew Corporation  $20.02  *** New Trading Range? ***

Andrew Corporation (NASDAQ:ANDW) is a supplier of communications
products and systems to the wireless subsystem infrastructure
market.  The company classifies its offerings into five primary
product groups: Antennas, Base Station Subsystems, Cable Products,
Network Solutions and Wireless Innovations. The Antenna segment
products include base station antennas, earth station antennas,
multi-band antennas and point-to-point antennas.  Base Station
Subsystems products are components of wireless base stations.
Cable Products include coaxial cables, connectors, assemblies and
accessories.  Network Solutions includes software and equipment to
locate wireless 911 callers, as well as equipment and services for
testing and optimizing wireless networks.  Wireless Innovations
products are used to extend the coverage of wireless networks in
areas where signals are difficult to send or receive and include
both complete systems and individual components.  Earnings are due
April 29, 2004.

MAY-20.00 AQN ED LB=1.35 OI=496 CB=18.67 DE=33 TY=6.6%


__________________________________________________________________

FCEL - FuelCell Energy  $19.44  *** Alternate Energy! ***

FuelCell Energy (NASDAQ:FCEL), based in Danbury, Connecticut, is
a world-recognized leader for development and commercialization
of high efficiency fuel cells for electric power generation.  The
company's DFC technology eliminates external fuel processing to
extract hydrogen from a hydrocarbon fuel.  This results in a
product whose cost, combined with high efficiency, simplicity and
reliability, results in product advantages for stationary power
generation.

MAY-17.50 FQG ET LB=2.80 OI=786 CB=16.64 DE=33 TY=4.8%


__________________________________________________________________

NSTK - Nastech Pharmaceutical  $13.61  *** Uptrend Intact! ***

Nastech Pharmaceutical Company (NASDAQ:NSTK) is a formulation
science company concerning nasal drug delivery technology.  The
firm's technical competency involves research, development and
manufacture of nasally administered prescription pharmaceuticals.
Nastech's sole approved and marketed product is Nascobal Gel for
treatment of Vitamin B-12 deficiency.  The company's products
under development include Apomorphine Hydrochloride, Morphine
Gluconate, Interferon Beta, Interferon Alpha, Sumatriptan and
Somatatropin.  Quarterly earnings are due April 21, 2004.

MAY-12.50 QUH EV LB=1.70 OI=17 CB=11.91 DE=33 TY=4.6%


__________________________________________________________________

ENDP - Endo Pharmaceuticals  $24.61  *** Entry Point? ***

Endo Pharmaceuticals (NASDAQ:ENDP) is a specialty pharmaceutical
company specializing in pain management.  The company is engaged
in the research, development, sale and marketing of branded and
generic prescription pharmaceuticals used primarily to treat and
manage pain.  The company's primary area of focus is analgesics,
with a portfolio of branded products that includes Percocet,
Lidoderm, Percodan and Zydone.  Endo's generic portfolio is
comprised of products that cover a broad range of indications,
most of which are focused in pain management.  Earnings are due
April 21, 2004.

MAY-22.50 IUK EX LB=3.10 OI=1,576 CB=21.51 DE=33 TY=4.2%


__________________________________________________________________

MGAM - Multimedia Games  $24.02  *** Next Leg Up? ***

Multimedia Games (NASDAQ:MGAM) is the leading supplier of
interactive electronic games and player stations to the rapidly
growing Native American gaming market.  The company's games are
delivered through a telecommunications network that links its
player stations with one another both within and among gaming
facilities.  Multimedia Games designs and develops networks,
software and content that provide its customers with a range of
gaming systems.  The company's development and marketing efforts
focus on Class II gaming systems and Class III video lottery
systems for use by Native American tribes throughout the United
States.  Quarterly earnings are due April 28, 2004.

MAY-22.50 QMG EX LB=2.45 OI=267 CB=21.56 DE=33 TY=4.0%


__________________________________________________________________

SAPE - Sapient  $6.25  *** Earnings Speculation! ***

Sapient (NASDAQ:SAPE) is a business and technology consultancy
that helps large clients achieve explicit business outcomes
through the rapid application and support of advanced information
technology (IT), primarily on a fixed-price basis.  The company's
global presence enables it to understand and address the business
issues that its clients are facing in both local and global con-
texts.  The company's global distributed delivery model, which is
primarily operated through its office in New Delhi, allows it to
provide solutions at a lower cost and the ability to work 24 hours
each day across all time zones.  Earnings are due April 29, 2004.

MAY-5.00 SQC EA LB=1.45 OI=40 CB=4.80 DE=33 TY=3.8%


__________________________________________________________________

MXWL - Maxwell Technologies  $16.27  *** Rally Mode! ***

Maxwell Technologies (NASDAQ:MXWL) develops, manufactures and
markets electronic components and systems that perform for the
life of the products and systems into which they are integrated.
The firm's power products address applications in transportation,
telecommunications, consumer and industrial electronics, electric
utility infrastructure, medical imaging and industrial automation
systems. The company's microelectronics products mainly address
applications in aerospace. Its power product lines consist of
ultracapacitors, high-voltage capacitors and custom power and
energy-storage systems.  Maxwell's microelectronic product lines
are composed of radiation-shielded power modules, memory modules
and single-board computers.

MAY-15.00 QMW EC LB=1.80 OI=94 CB=14.47 DE=33 TY=3.4%


__________________________________________________________________

ASTE - Astec Industries  $16.40  *** Near 2-Year Highs! ***

Astec Industries (NASDAQ:ASTE) designs, engineers, manufactures
and sells equipment and components used in road building and
related construction activities.  The firm's products are used
in each phase of road building, from quarrying and crushing the
aggregate to testing the mix for application of the road surface.
Astec also makes certain equipment and components unrelated to
road construction, including trenching, auger boring, directional
drilling, environmental remediation and industrial heat transfer
equipment.  Quarterly earnings are due April 21, 2004.

MAY-15.00 QYA EC LB=1.90 OI=10 CB=14.50 DE=33 TY=3.2%



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

SEE DISCLAIMER IN SECTION ONE

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


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

A Market Without Conviction...
By Ray Cummins

Stocks closed the week in mixed fashion as differing opinions
among investors prompted buying interest in financial and real
estate shares while selling pressure emerged in hi-tech issues.

The Dow Jones Industrial Average ended up 54 points at 10,451
with banking-related stocks among the blue-chip leaders.  The
NASDAQ Composite closed down 6 points at 1,995 amid a slump in
semiconductor and networking companies.  The S&P 500 gained 5
points to 1,134 on strength in energy and utility stocks.  In
the broader market, advancers led decliners 3 to 1 on the NYSE
where trading volume was 1.1 billion.  On the NASDAQ, winners
slipped past losers by a small margin with 1.46 billion shares
changing hands.  Treasury prices extended their gains after the
release of mediocre industrial production data and some positive
comments from a Federal Reserve governor.  The 10-year note was
up 13/32 at 97 8/32 to yield 4.35%.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SUMMARY OF CURRENT POSITIONS - AS OF 04/16/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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  91.86   APR  65  70   0.60  69.40   0.60  Closed
KBH     78.71  73.50   APR  65  70   0.55  69.45   0.55  Closed
COF     73.50  73.72   APR  60  65   0.50  64.50   0.50  Closed
SYMC    44.64  45.67   APR  37  40   0.35  39.65   0.35  Closed
DNA    106.82 108.78   APR  90  95   0.60  94.40   0.60  Closed
FDX     71.59  74.50   APR  65  70   0.85  69.15   0.85  Closed
LLL     56.67  61.59   APR  50  55   0.50  54.50   0.50  Closed
TASR    61.80 114.10   APR  45  50   0.60  49.40   0.60  Closed
DE      68.23  73.31   APR  60  65   0.40  64.60   0.40  Closed
FFIV    31.87  30.80   APR  25  30   0.55  29.45   0.55  Closed
MRVL    42.67  44.95   APR  37  40   0.20  39.80   0.20  Closed
NCEN    48.56  44.84   APR  40  45   0.45  44.55   0.29  Closed
RIMM   104.14 100.55   APR  85  90   0.50  89.50   0.50  Closed
YHOO    50.15  54.14   APR  45  47   0.35  47.15   0.35  Closed
HSIC    75.81  76.26   MAY  65  70   0.45  69.55   0.45   Open
NAV     49.90  48.53   MAY  40  45   0.60  44.40   0.60   Open
HDI     55.63  58.00   MAY  47  50   0.25  49.75   0.25   Open
PDCO    74.97  78.62   MAY  65  70   0.65  69.35   0.65   Open

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

Previously closed positions in Hughes Supply (NYSE:HUG), Beazer
(NYSE:BZH) and KB Home (NYSE:KBH); $75 strike, ended the April
expiration period profitably.  Countrywide Financial (NYSE:CFC)
finished with a debit of $2.90, however the position was closed
early to limit potential losses.


CALL-CREDIT SPREADS

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

DISH    35.50  33.01   APR  42  40   0.30  40.30   0.30  Closed
NVLS    31.15  31.15   APR  37  35   0.35  35.35   0.35  Closed
VSEA    40.85  40.03   APR  50  45   0.60  45.60   0.60  Closed
SFA     31.96  31.56   APR  40  35   0.55  35.55   0.55  Closed
BBBY    39.04  38.53   APR  45  42   0.25  42.75   0.25  Closed
MSTR    52.64  50.89   APR  65  60   0.60  60.60   0.60  Closed
NTLI    53.12  58.55   APR  65  60   0.60  60.60   0.60  Closed
SINA    35.96  35.58   APR  45  40   0.70  40.70   0.70  Closed
AFCO    27.85  28.56   APR  35  30   0.55  30.55   0.55  Closed
CCMP    42.13  37.11   APR  50  45   0.45  45.45   0.45  Closed
PHM     52.87  48.55   APR  60  55   0.40  55.40   0.40  Closed
SOHU    25.46  23.14   MAY  35  30   0.60  30.60   0.60   Open
SFNT    31.65  29.66   MAY  40  35   0.70  35.70   0.70   Open
MERQ    45.59  45.68   MAY  55  50   0.60  50.60   0.60   Open
NEM     42.86  43.06   MAY  50  47   0.25  47.75   0.25   Open
RYL     77.41  78.18   MAY  90  85   0.60  85.60   0.60   Open

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

Bearish spreads on Xilinx (NASDAQ:XLNX), which is profitable, as
well as those on Adobe (NASDAQ:ADBE), Cognos (NASDAQ:COGN), and
Cooper-Cameron (NYSE:CAM), have previously been closed to limit
potential losses.


INDEX-BASED CREDIT SPREADS (BULLISH)

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

OEX    543.68  554.94   APR   515  520  0.40  519.60  0.40  Closed
SPX   1109.78 1134.57   APR  1050 1060  0.80 1059.20  0.80  Closed

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


INDEX-BASED CREDIT SPREADS (BEARISH)

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

OEX    543.68  554.94   APR   575  580  0.45  570.45  0.45  Closed
SPX   1109.78 1134.57   APR  1170 1160  1.00 1161.00  1.00  Closed

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


DEBIT STRADDLES

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

GLBC    13.86  19.00   APR    15    12     1.80    5.50   Closed
SNP     40.74  37.45   APR    40    40     5.70    5.70   Closed
CCMP    44.55  37.11   APR    45    45     5.90    8.00   Closed
BRKS    22.66  19.13   APR    22    22     1.60    3.90   Closed
GCI     90.42  90.10   APR    90    90     1.75    2.10   Closed
SEBL    12.15  11.40   APR    12    12     0.75    1.25   Closed
AMX     35.66  37.44   MAY    35    35     3.65    5.00   Closed
AIG     74.28  75.18   MAY    75    75     5.60    7.80   Closed
SLB     65.13  64.15   MAY    65    65     6.75    6.50   Closed
LF      19.67  21.97   JUN    20    20     3.50    3.25    Open
BSTE    30.63  40.00   JUL    30    30     6.00   11.50    Open?
MKSI    23.10  21.82   JUL    22    22     4.70    5.50    Open

The straddles portfolio offered some outstanding candidates in
April with big (potential) winners in Biosite (NASDAQ:BSTE),
Brooks Automation (NASDAQ:BRKS), Siebel Systems(NASDAQ:SEBL),
and Global Crossing (NASDAQ:GLBC).  Cabot Micro (NASDAQ:CCMP)
also achieved profitability during last week's slump.  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.

__________________________________________________________________

INDEX-BASED CREDIT SPREADS

As a trader, you may be familiar with options on individual stocks
where you have the right to buy (call option) or the right to sell
(put option) a particular stock at some predetermined price within
some predetermined time.  The buyer has the rights and the seller
the obligations.  With index options the basic ideas are the same.
Index options allow you to make investment decisions on a specific
industry group or on the market as a whole.  Spread strategies can
be made with index options similar to those made with individual
stock options and professional traders also employ index spreads
in common hedge strategies.  Traders who participate in OTM credit
spreads often utilize index options because they generally contain
favorable "premium" and also provide an underlying instrument less
prone to huge, gapping moves.
__________________________________________________________________

OEX - S&P 100 Index  $554.94  *** Index Spreads ***

Standard & Poor's 100 Index is a capitalization-weighted index
of 100 stocks from a broad range of industries.  The component
stocks are weighted according to the total market value of their
outstanding shares.  The impact of a component's price change is
proportional to the issue's total market value, which is the share
price times the number of shares outstanding.  Trading in S&P-100
options will ordinarily cease on the business day preceding the
expiration date.  OEX options generally may be exercised on any
business day before the expiration date.

OEX - S&P 100 Index  $554.94

PLAY (conservative - bullish/credit spread):

BUY  PUT  MAY-525.00  OEB-QE  OI=1200  ASK=$2.40
SELL PUT  MAY-530.00  OEB-QF  OI=4690  BID=$2.85
INITIAL NET-CREDIT TARGET=$0.50-$0.55
POTENTIAL PROFIT(max)=11% B/E=$529.50


__________________________________________________________________

SPX - S&P 500 Index  $1134.61  *** Index Spreads ***

Standard & Poor's 500 Index is a capitalization-weighted index
of 500 stocks from a broad range of industries.  The component
stocks are weighted according to the total market value of their
outstanding shares.  The impact of a component's price change is
proportional to the issue's total market value, which is the share
price times the number of shares outstanding.  These are summed
for all 500 stocks and divided by a predetermined base value.  The
base value for the S&P 500 Index is adjusted to reflect changes in
capitalization resulting from mergers, acquisitions, stock rights,
substitutions, etc.  Trading in SPX options will ordinarily cease
on the business day (usually a Thursday) preceding the day on which
the exercise-settlement value is calculated.  SPX options generally
may be exercised only on the last business day before expiration.

SPX - S&P 500 Index  $1134.61

PLAY (conservative - bullish/credit spread):

BUY  PUT  MAY-1090.00  SPQ-QR  OI=1      ASK=$7.60
SELL PUT  MAY-1100.00  SPT-QT  OI=31913  BID=$8.50
INITIAL NET-CREDIT TARGET=$0.95-$1.00
POTENTIAL PROFIT(max)=10% B/E=$1099.05


__________________________________________________________________

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.

__________________________________________________________________

OEX - S&P 100 Index  $554.94  *** Index Spreads ***

Standard & Poor's 100 Index is a capitalization-weighted index
of 100 stocks from a broad range of industries.  The component
stocks are weighted according to the total market value of their
outstanding shares.  The impact of a component's price change is
proportional to the issue's total market value, which is the share
price times the number of shares outstanding.  Trading in S&P-100
options will ordinarily cease on the business day preceding the
expiration date.  OEX options generally may be exercised on any
business day before the expiration date.

OEX - S&P 100 Index  $554.94

PLAY (less conservative - bearish/credit spread):

BUY  CALL  MAY-580.00  OEB-EP  OI=5461  ASK=$1.00
SELL CALL  MAY-575.00  OEB-EO  OI=4214  BID=$1.60
INITIAL NET-CREDIT TARGET=$0.65-$0.70
POTENTIAL PROFIT(max)=15% B/E=$575.65


__________________________________________________________________

SPX - S&P 500 Index  $1134.61  *** Index Spreads ***

Standard & Poor's 500 Index is a capitalization-weighted index
of 500 stocks from a broad range of industries.  The component
stocks are weighted according to the total market value of their
outstanding shares.  The impact of a component's price change is
proportional to the issue's total market value, which is the share
price times the number of shares outstanding.  These are summed
for all 500 stocks and divided by a predetermined base value.  The
base value for the S&P 500 Index is adjusted to reflect changes in
capitalization resulting from mergers, acquisitions, stock rights,
substitutions, etc.  Trading in SPX options will ordinarily cease
on the business day (usually a Thursday) preceding the day on which
the exercise-settlement value is calculated.  SPX options generally
may be exercised only on the last business day before expiration.

SPX - S&P 500 Index  $1134.61

PLAY (conservative - bearish/credit spread):

BUY  CALL  MAY-1170.00  SPT-EN  OI=0     ASK=$5.00
SELL CALL  MAY-1165.00  SPT-EM  OI=3292  BID=$5.40
INITIAL NET-CREDIT TARGET=$0.45-$0.50
POTENTIAL PROFIT(max)=9% B/E=$1165.45




~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
DEBIT SPREADS
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

This strategy offers a risk-reward outlook similar to credit
spreads, however there is no margin requirement as the initial
debit for the position is also the maximum loss.  Since these
positions are based primarily on technical indications, traders
should review the current news and market sentiment surrounding
each issue and make their own decision about the outcome of the
position.


SUPPLEMENTAL CANDIDATES

The following group of issues is a list of additional candidates
to supplement your search for profitable trading positions.  As
with any investment, you must decide if the selections meet your
criteria for potential plays. Only you can know what strategies
and positions are suitable for your experience level, risk-reward
tolerance and portfolio outlook.  They will not be included in the
weekly portfolio summary.
__________________________________________________________________


CALL DEBIT SPREADS

Stock   Current Long    Ask    Short   Bid    Cost   Spread  ROI
Symbol  Price   Call    Price  Call    Price  Basis  Debit   in%

BIIB    59.46   IDKEJ  10.10   IDKEK   5.60   54.50   4.50   11.1
CECO    62.31   CUYEJ  13.10   CUYEK   8.60   54.50   4.50   11.1
ELAB    70.90   ESQEL  11.60   ESQEM   7.10   64.50   4.50   11.1
LXK     93.85   LXKEP  14.50   LXKEQ  10.00   84.50   4.50   11.1
MEE     24.34   MEEED   4.60   MEEEX   2.35   22.25   2.25   11.1
LEND    33.78   QFWEE   9.20   QFWEF   4.70   29.50   4.50   11.1
MTG     69.70   MTGEL  10.10   MTGEM   5.60   64.50   4.50   11.1
NAV     48.53   NAVEH   8.80   NAVEI   4.30   44.50   4.50   11.1
NTES    51.68   NQGEH  12.40   NQGEI   7.90   44.50   4.50   11.1
RJR     60.04   RJREJ  10.40   RJREK   5.90   54.50   4.50   11.1


PUT DEBIT SPREADS

Stock   Current Long    Ask    Short   Bid    Cost   Spread  ROI
Symbol  Price   Put     Price  Put     Price  Basis  Debit   in%

INTU    42.09   IQUQW   5.60   IQUQI   3.40   45.30   2.20   13.6
NANO    15.30   QNKQD   5.30   QNKQW   3.10   17.80   2.20   13.6
SINA    35.58   NOQQI  10.10   NOQQH   5.70   40.60   4.40   13.6
UTEK    20.64   UQTQE   4.80   UQTQX   2.60   22.80   2.20   13.6
AMAT    20.80   ANQQE   4.30   ANQQX   2.10   22.80   2.20   13.6
ABI     19.00   ABIQX   3.60   ABIQD   1.40   20.30   2.20   13.6
IFIN    40.25   FLQQI   5.20   FLQQV   3.00   42.80   2.20   13.6
ISSI    16.40   IUHQD   4.10   IUHQW   1.85   17.75   2.25   11.1
MERQ    45.68   RQBQK   9.60   RQBQJ   5.10   50.50   4.50   11.1
HELX    21.34   HHQQE   4.30   HHQQX   2.05   22.75   2.25   11.1
AMZN    45.50   ZQNQK   9.80   ZQNQJ   5.30   50.50   4.50   11.1


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

_________________________________________________________________

SSYS - Stratasys  $20.88  *** Earnings Speculation! ***

Stratasys (NASDAQ:SSYS) manufactures and sells a line of rapid
prototyping and three-dimensional printing devices that create
physical models from computerized designs.  The company's rapid
prototyping systems are based on its patented fused deposition
modeling technology or on its patented Genisys technology.  The
company is also involved in the office prototyping market (rapid
prototyping) and develops, manufactures and markets a family of
rapid prototyping devices and 3-D printers that enable engineers
and designers to create physical models, tooling and prototypes
out of plastic and other materials directly from a computer-aided
design workstation.  Earnings are due 4/28/04.

SSYS - Stratasys  $20.88

PLAY (speculative - neutral/debit strangle):

BUY CALL  MAY-22.50  QQG-EX  OI=229  ASK=$1.05
BUY PUT   MAY-20.00  QQG-QD  OI=170  ASK=$1.20
INITIAL NET-DEBIT TARGET=2.05-$2.15
INITIAL TARGET PROFIT=$0.75-$1.40


_________________________________________________________________

ZMH - Zimmer Holdings  $80.84  *** Probability Play ***

Zimmer Holdings (NYSE:ZMH) is primarily engaged in the design,
development, manufacture and sale of orthopaedic reconstructive
implants and trauma products.  Orthopaedic implants restore
joint function lost due to disease or trauma in joints such as
knees, hips, shoulders and elbows.  Trauma products are devices
used primarily to reattach or stabilize damaged bone or tissue
to support the body's natural healing process.  The company also
manufactures and markets orthopaedic surgical products, which
include surgical supplies and instruments designed to aid in
orthopaedic surgical procedures.  Earnings are due 4/26/04.

ZMH - Zimmer Holdings  $80.84

PLAY (speculative - neutral/debit straddle):

BUY CALL  MAY-80.00  ZMH-EP  OI=969  ASK=$3.00
BUY PUT   MAY-80.00  ZMH-QP  OI=72   ASK=$2.05
INITIAL NET-DEBIT TARGET=4.75-$4.90
INITIAL TARGET PROFIT=$2.00-$3.25



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

SEE DISCLAIMER - SECTION 1

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


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*****************************************
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 04/16/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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   43.48    0.90   5.98%   2.77%
NEOL     APR    15    14.65   19.44    0.35   5.57%   2.39%
OSTK     APR    25    24.30   33.89    0.70   7.25%   2.88%
APPX     APR    33    32.73   43.48    0.65   5.76%   1.99%
ASKJ     APR    25    24.15   36.11    0.85   9.04%   3.52%
CLZR     APR    11    11.07   15.85    0.17   4.72%   1.54%
JNPR     APR    22    21.85   25.17    0.65   7.82%   2.97%
NEOL     APR    15    14.65   19.44    0.35   6.74%   2.39%
PDII     APR    22    21.80   25.93    0.70   8.31%   3.21%
SWIR     APR    22    22.15   42.16    0.35   5.03%   1.58%
APPX     APR    33    33.03   43.48    0.35   4.71%   1.06%
BRCM     APR    35    34.55   39.76    0.45   4.64%   1.30%
ELN      APR    15    14.65   22.00    0.35   9.84%   2.39%
OSTK     APR    22    22.25   33.89    0.25   4.47%   1.12%
PCLN     APR    20    19.75   24.64    0.25   4.90%   1.27%
SYMC     APR    40    39.40   45.67    0.60   4.89%   1.52%
XMSR     APR    25    24.40   27.32    0.60   7.74%   2.46%
YHOO     APR    40    39.40   54.14    0.60   5.13%   1.52%
APPX     APR    35    34.45   43.48    0.55   6.27%   1.60%
ASKJ     APR    25    24.55   36.11    0.45   7.51%   1.83%
CMC      APR    30    29.60   29.60    0.00   0.00%   1.35%
CSGS     APR    15    14.65   16.26    0.35   7.65%   2.39%
ECLG     APR    17    17.20   20.52    0.30   6.26%   1.74%
JILL     APR    17    17.15   19.99    0.35   6.38%   2.04%
MGAM     APR    22    22.05   24.01    0.45   6.80%   2.04%
PBY      APR    25    24.50   27.62    0.50   5.97%   2.04%
SUPG     APR     7     7.15    7.74    0.35  16.86%   4.90%
AGI      APR    30    29.55   31.09    0.45   5.39%   1.52%
ASKJ     APR    25    24.60   36.11    0.40   6.62%   1.63%
ENDP     APR    20    19.75   24.61    0.25   4.98%   1.27%
NFLD     APR    12    12.15   15.35    0.35  12.17%   2.88%
PBY      APR    25    24.55   27.62    0.45   6.18%   1.83%
PLMO     APR    15    14.65   20.65    0.35   9.66%   2.39%
RSAS     APR    15    14.55   17.58    0.45  10.23%   3.09%
SHFL     APR    40    39.60   47.83    0.40   4.13%   1.01%
SYMC     APR    40    39.35   45.67    0.65   5.79%   1.65%
ASCA     APR    30    29.70   32.91    0.30   4.73%   1.01%
ASKJ     APR    30    29.40   36.11    0.60   9.72%   2.04%
ERJ      APR    30    29.40   29.38   (0.02)  0.00%   2.04%
IMM      APR    15    14.70   19.44    0.30  11.43%   2.04%
INSP     APR    30    29.70   39.97    0.30   5.70%   1.01%
MICC     APR    18    16.90   23.60    0.60  15.59%   3.55%
MNST     APR    22    22.20   27.90    0.30   5.95%   1.35%
TKTX     APR    15    14.50   15.50    0.50  17.25%   3.45%
APPX     APR    43    42.63   43.48    0.75   8.92%   1.76%
ASKJ     APR    30    29.70   36.11    0.30   6.44%   1.01%
COCO     APR    30    29.75   32.83    0.25   4.55%   0.84%
TTN      APR    17    17.25   19.53    0.25   8.43%   1.45%
TTWO     APR    35    34.55   31.25   (3.30)  0.00%   1.30% *
BARZ     APR    35    34.35   40.80    0.65  12.11%   1.89%
TRID     APR    15    14.75   15.36    0.25  12.19%   1.69%
UTHR     APR    22    22.05   22.76    0.45  13.47%   2.04%
XMSR     APR    27    27.20   27.32    0.12   3.08%   1.10%
PDII     APR    25    24.55   25.93    0.45  15.04%   1.83%
FWHT     MAY    17    17.15   21.01    0.35   4.27%   2.04%
MICC     MAY    17    17.15   23.60    0.35   4.39%   2.04%
MNST     MAY    22    21.95   27.90    0.55   4.48%   2.51%
PLMO     MAY    17    16.90   20.65    0.60   6.80%   3.55%
HNT      MAY    22    22.00   26.05    0.50   4.76%   2.27%
IPXL     MAY    20    19.50   23.24    0.50   5.43%   2.56%
SSNC     MAY    22    21.60   25.00    0.90   7.85%   4.17%
TINY     MAY    15    14.70   18.73    0.30   4.60%   2.04%
ACCL     MAY    17    17.25   17.19   (0.06)  0.00%   1.45%
ADEX     MAY    20    19.45   21.17    0.55   6.05%   2.83%
IMM      MAY    15    14.70   19.44    0.30   5.24%   2.04%
IPXL     MAY    20    19.65   23.24    0.35   4.93%   1.78%
JBLU     MAY    22    22.15   24.60    0.35   4.11%   1.58%
LSCP     MAY    22    21.95   26.97    0.55   6.11%   2.51%
TINY     MAY    17    17.00   18.73    0.50   7.27%   2.94%
USG      MAY    15    14.25   15.46    0.75  11.45%   5.26%
XMSR     MAY    25    24.50   27.32    0.50   4.90%   2.04%
ASKJ     MAY    30    29.50   36.11    0.50   5.42%   1.69%
BRCM     MAY    37    36.70   39.76    0.80   5.86%   2.18%
CLZR     MAY    15    14.25   15.85    0.75  12.47%   5.26%
FWHT     MAY    20    19.35   21.01    0.65   8.83%   3.36%
IMM      MAY    17    17.05   19.44    0.45   8.37%   2.64%
INSP     MAY    35    34.45   39.97    0.55   5.28%   1.60%
MRVL     MAY    42    41.55   44.95    0.95   6.00%   2.29%
NFLX     MAY    27    27.10   30.75    0.40   4.65%   1.48%
ESIO     MAY    22    22.10   23.55    0.40   6.15%   1.81%
HOLX     MAY    20    19.50   22.07    0.50   8.05%   2.56%
GVHR     MAY    25    24.65   28.20    0.35   5.85%   1.42%
HSII     MAY    22    22.25   24.30    0.25   3.81%   1.12%
IMM      MAY    17    17.25   19.44    0.25   6.08%   1.45%
LF       MAY    20    19.55   21.97    0.45   7.54%   2.30%
TOMO     MAY    12    12.25   13.03    0.25   6.96%   2.04%
TSAI     MAY    20    19.80   22.71    0.20   4.37%   1.01%
TSO      MAY    20    19.50   21.25    0.50   8.18%   2.56%

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.  The
position in Take-Two Interactive (NASDAQ:TTWO) should have
been closed prior to the earnings report, for a smaller than
published loss, when the price of the issue dropped to the
sold put strike at $35.00.


NAKED CALLS

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

SEAC     APR    20    20.40   13.45    0.40   7.86%   1.96%
ERES     APR    35    35.30   29.81    0.30   4.73%   0.85%
FARO     APR    30    30.40   22.44    0.40   7.33%   1.32%
AFCI     APR    25    25.50   20.41    0.50   8.84%   1.96%
FLSH     APR    22    22.75   19.01    0.25   5.62%   1.10%
ADTN     APR    35    35.80   28.13    0.80   9.56%   2.23%
DISH     APR    35    35.65   33.01    0.65   6.34%   1.82%
MTLM     APR    40    40.60   35.90    0.60   9.68%   1.48%
NIHD     APR    35    35.30   34.54    0.30   4.43%   0.85%
BRL      APR    50    50.40   46.15    0.40   4.08%   0.79%
SCHN     APR    32    33.68   32.25    0.30   7.13%   0.89%
OVTI     APR    30    30.50   25.65    0.50  10.89%   1.64%
SNDK     APR    32    32.75   26.52    0.25   6.38%   0.76%
HOV      APR    42    42.90   39.25    0.40   7.29%   0.93%
AFCI     MAY    25    25.75   20.41    0.75   7.73%   2.91%
QLGC     MAY    37    37.95   28.80    0.45   4.22%   1.19%
AVCT     MAY    37    38.15   33.13    0.65   6.74%   1.70%
INTU     MAY    47    48.00   42.09    0.50   4.10%   1.04%
PPCO     MAY    20    20.30   16.39    0.30  10.11%   1.48%

Positions in NII Holdings (NASDAQ:NIHD) and Schnitzer Steel
(NASDAQ:SCHN), which finished the April expiration period
profitable, and Career Education (NASDAQ:CECO), have 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

APPX     MAY    35    34.40   43.48    0.60   5.81%   1.74%
BLDP     MAY    10     9.75   11.22    0.25   6.55%   2.56%
ELN      MAY    17    17.30   22.00    0.20   4.01%   1.16%
ERES     MAY    25    24.50   29.81    0.50   6.05%   2.04%
HOLX     MAY    20    19.65   22.07    0.35   4.54%   1.78%
LSCP     MAY    22    22.10   26.97    0.40   5.49%   1.81%
PDII     MAY    22    21.75   25.93    0.75   8.99%   3.45%
TELK     MAY    22    22.20   27.33    0.30   4.32%   1.35%
TNOX     MAY    15    14.50   16.64    0.50   8.35%   3.45%

__________________________________________________________________

APPX - American Pharma Partners  $43.48  *** Premium-Selling! ***

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

APPX - American Pharma Partners  $43.48

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    AQO QG    1226   0.60  34.40   5.8%   1.7% *
SELL PUT  MAY 40    AQO QH    1207   1.85  38.15  10.8%   4.8%


__________________________________________________________________

BLDP - Ballard Power Systems  $11.22  *** Re-Energized! ***

Ballard Power Systems (NASDAQ:BLDP) develops, manufactures and
markets zero-emission proton exchange membrane (PEM) fuel cells.
BLDP is commercializing fuel cell engines for the transportation
market, electric drives for both fuel cell and battery-powered
electric vehicles, power conversion products for fuel cell
generators, microturbines and other distributed generation
technologies, and fuel cell systems for markets ranging from
portable power products to larger stationary generation products.

BLDP - Ballard Power Systems  $11.22

PLAY (sell naked put):

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

SELL PUT  MAY 10    DUJ QB    569    0.25   9.75   6.6%   2.6% *


__________________________________________________________________

ELN - Elan Corporation  $22.00  *** Rally Mode! ***

Elan Corporation (NYSE:ELN) is an integrated biopharmaceutical
firm engaged in research and development in Alzheimer's disease,
Parkinson's disease, multiple sclerosis, pain management and
autoimmune diseases.  The company's objective is to discover and
develop products that will fulfill the unmet medical needs of
patients.  Elan conducts its global business, including research,
development, manufacturing and marketing, through subsidiaries
incorporated in Ireland, the United States, the United Kingdom
and other countries.

ELN - Elan Corporation  $22.00

PLAY (sell naked put):

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

SELL PUT  MAY 17.5  ELN QW    1393   0.20  17.30   4.0%   1.2% TS
SELL PUT  MAY 20    ELN QD    4341   0.75  19.25   9.2%   3.9%


__________________________________________________________________

ERES - eResearch Technology  $29.81  *** Uptrend Resumes! ***

eResearch Technology (NASDAQ:ERES) is a provider of technology and
services that enable the pharmaceutical, biotechnology and medical
device industries to collect, interpret and distribute cardiac
safety and clinical data more efficiently.  The company offers a
range of products and services, including Diagnostics Technology
and Services and Clinical Research Technology.  Their Diagnostics
Technology and Services include centralized diagnostic services
and clinical research operations, including clinical trial and
data management services.  Their Clinical Research Technology and
Services include the developing, marketing and support of clinical
research technology and services.

ERES - eResearch Technology  $29.81

PLAY (sell naked put):

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

SELL PUT  MAY 25    UDB QE     317   0.50  24.50   6.1%   2.0% *
SELL PUT  MAY 27.5  UDB QY     440   1.10  26.40   9.5%   4.2%


__________________________________________________________________

HOLX - Hologic  $22.07  *** Near "All-Time" Highs! ***

Hologic (NASDAQ:HOLX) is engaged in the development, manufacture
and distribution of diagnostic and medical imaging systems for
the healthcare needs of women.  Its healthcare businesses are
focused on bone densitometry, mammography and direct-to-digital
radiography.  In addition, Hologic develops, makes and supplies
other x-ray-based imaging systems, such as direct-to-digital
radiography equipment and mini C-arm imaging products.  The firm
has begun to sell, distribute and service complementary products
that were developed and manufactured by other original equipment
manufacturers.

HOLX - Hologic  $22.07

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    QHX QD    100    0.35  19.65   4.5%   1.8% *


__________________________________________________________________

LSCP - Laserscope  $26.97  *** Next Leg Up? ***

Laserscope (NASDAQ:LSCP) designs, manufactures, sells and services
on a worldwide basis an advanced line of medical laser systems and
related energy devices for the medical office, outpatient surgical
center and hospital markets.  The firm pioneered development and
commercialization of lasers and advanced fiber-optic devices for a
variety of applications.  The company's product portfolio consists
of more than 150 medical laser systems and related energy delivery
devices.  The firm's primary medical markets include dermatology,
aesthetic surgery and urology.  Its secondary markets include ear,
nose & throat surgery, general surgery, gynecology, photo-dynamic
therapy and other surgical specialties.

LSCP - Laserscope  $26.97

PLAY (sell naked put):

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

SELL PUT  MAY 22.5  LXQ QX      57   0.40  22.10   5.5%   1.8% *
SELL PUT  MAY 25    LXQ QE      85   1.10  23.90  10.2%   4.6%


__________________________________________________________________

PDII - PDI Incorporated  $25.93  *** In A Trading Range? ***

PDI (NASDAQ:PDII) is an innovative healthcare sales and marketing
provider to biopharmaceutical and medical devices companies and
and the diagnostics industry.  Its three business units offer
service and product-based capabilities for companies seeking to
maximize profitable brand sales growth.  The three units include
PDI Pharmaceutical Products, PDI Sales and Marketing Services,
and PDI Medical Devices and Diagnostics.

PDII - PDI Incorporated  $25.93

PLAY (sell naked put):

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

SELL PUT  MAY 22.5  PKU QX      56   0.75  21.75   9.0%   3.4% *
SELL PUT  MAY 25    PKU QE      25   1.45  23.55  12.3%   6.2%


__________________________________________________________________

TELK - Telik  $27.33  *** New Drug Speculation! ***

Telik (NASDAQ:TELK) is a biopharmaceutical company working to
discover, develop and commercialize small-molecule drugs to treat
serious diseases, including cancer and diabetes.  Among Telik's
most advanced product development programs is TLK286.  TLK286 is
a small-molecule tumor-activated cancer drug that the company is
evaluating initially to treat cancers which are resistant to
standard chemotherapy drugs.  Another advanced product, TLK199,
is a small-molecule bone marrow stimulant being developed for the
treatment of blood disorders associated with low white blood cell
levels.  TLK19781 is a proprietary, orally active small-molecule
insulin receptor activator for the potential treatment of Type II
diabetes and other conditions related to insulin resistance.

TELK - Telik  $27.33

PLAY (sell naked put):

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

SELL PUT  MAY 22.5  ZUL QX       0   0.30  22.20   4.3%   1.4% TS
SELL PUT  MAY 25    ZUL QE     423   0.95  24.05   9.2%   4.0%


__________________________________________________________________

TNOX - Tanox  $16.64  *** Xolair Settlement = Rebound! ***

Tanox (NASDAQ:TNOX) discovers and develops therapeutic monoclonal
antibodies to address significant unmet medical needs in the areas
of asthma, allergy, inflammation and other diseases affecting the
human immune system.  Their products are genetically engineered
antibodies that target a specific molecule (antigen).  Tanox has
discovered a novel approach for treating allergies and asthma by
using anti-immunoglobulin E antibodies capable of blocking IgE, a
causative agent of the allergy pathway, thus preventing the onset
of disease symptoms.

TNOX - Tanox  $16.64

PLAY (sell naked put):

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

SELL PUT  MAY 15    TMQ QC    335    0.50  14.50   8.4%   3.4% *



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

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.

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

NANO - Nanometrics  $15.30  *** "Nano" Craze Fading? ***

Nanometrics (NASDAQ:NANO) designs, manufactures, markets and
supports the thin film metrology systems for the semiconductor,
flat panel display and magnetic recording head industries.  The
company's measurement systems use microscope-based, non-contact
spectroscopic reflectometry.  Some of the firm's systems provide
complementary spectroscopic ellipsometry to measure the thickness
and optical characteristics of films on a variety of substrates.
In addition, the firm has both integrated and standalone optical
critical metrology systems to measure critical dimensions of the
patterns on semiconductor wafers.  The company also manufactures
a line of optical overlay registration systems that are used to
determine the alignment accuracy of successive layers of chip
patterns on wafers in the photolithography process.

NANO - Nanometrics  $15.30

PLAY (sell naked call):

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

SELL CALL  MAY 20    QNK ED    288    0.40  20.40  10.7%   2.0%
SELL CALL  MAY 17.5  QNK EW    891    1.00  18.50  18.7%   5.4%


__________________________________________________________________

SINA - SINA Corporation  $35.58  *** Next Leg Down? ***

SINA Corporation (NASDAQ:SINA), formerly known as SINA.com, is an
online media company and value-added information service provider
for China and the global Chinese communities.  With a branded
network of localized Websites targeting China and overseas Chinese,
the company provides an array of services to its users including
region-focused online portals, search, directory, interest-based
and community-building channels, free and premium e-mail, wireless
short messaging, online games, virtual Internet service provider,
classified listings, e-commerce, e-learning, and enterprise
e-solutions.  In turn, SINA generates revenue through advertising,
fee-based services, e-commerce and enterprise services.

SINA - SINA Corporation  $35.58

PLAY (sell naked call):

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

SELL CALL  MAY 45    NOQ EI    4048   0.55  45.55   6.6%   1.2% *
SELL CALL  MAY 40    NOQ EH    2902   1.40  41.40  11.5%   3.4%



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

SEE DISCLAIMER - SECTION 1

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


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