The Option Investor Newsletter Tuesday 08-31-2004 Copyright 2004, All rights reserved. 1 of 3 Redistribution in any form strictly prohibited. In Section One: Wrap: Brought to You By the Letter "E" Futures Markets: See Note Index Trader Wrap: Dow, SPX, OEX finish month with gains, while NDX finds losses Market Sentiment: September Looms Large Posted online for subscribers at http://www.OptionInvestor.com ************************************************************ MARKET WRAP (view in courier font for table alignment) ************************************************************ 08-31-2004 High Low Volume Adv/Dcl DJIA 10173.92 + 51.40 10173.92 10074.22 1.38 bln 2257/ 992 NASDAQ 1838.10 + 1.60 1842.15 1819.62 1.31 bln 1782/1240 S&P 100 538.77 + 2.22 538.79 533.79 Totals 4039/2232 S&P 500 11-4.24 + 5.09 1104.24 1094.72 SOX 371.02 - 2.60 373.66 363.61 RUS 2000 547.93 + 3.37 548.45 541.96 DJ TRANS 3105.46 + 20.10 3108.80 3084.50 VIX 15.29 - 0.15 15.85 15.28 VXO (VIX-O)14.98 - 0.13 16.09 14.92 VXN 22.92 - 0.22 23.66 22.91 Total Volume 2,945M Total UpVol 1,734M Total DnVol 1,182M Total Adv 4556 Total Dcl 2567 52wk Highs 146 52wk Lows 106 TRIN 1.14 NAZTRIN 1.89 PUT/CALL 0.71 ************************************************************ Brought to You By the Letter "E" by Jim Brown Today's market action was brought to you by the letter "E". Elections, earnings, extremists, energy, economy, employment and events all seem to have played a part in the early negativity and the ending rebound. Add in the "E"nd of month window dressing and play list was complete. Dow Chart Nasdaq Chart SPX Chart SOX Chart It was a busy day economically and that is as good a place to start as any. The Chain Store Sales fell again by -0.2% for the week and that theme was carried over in the later reports as well. The Consumer Confidence for August fell a whopping -7.5 points to 98.2 from the 105.7 multi year high for the year in July. Consumers continue to flip flop on sentiment and confidence but the pattern is clear. They are not supporting the economy by buying more goods and services. We know this is based on future election unknowns and a drag on spending due to higher gas prices. The biggest decline was in the expectations component which dropped from 105.3 to 96.6 for August. This nearly -10 point drop was the biggest decline since February's drop to 91.9 from 105.3. After that drop we struggled back to the triple digit level for June and July but the bottom fell out again last month. The present situation component also fell from 106.4 to 100.7. Those consumers planning on making major purchases of an appliance, car or home declined sharply. Jobs appeared to not be a concern as the numbers reflecting jobs were nearly unchanged. The Sentiment numbers today were much worse than the Confidence numbers last Friday which were slightly better than expected but still down for the month at 95.9. Monthly Mass Layoffs rose to 2,094 events that impacted 253,929 workers, an +88% increase. This was the second consecutive major increase from the low of 988 events and only 87,501 workers laid off in May. Today's number was a +12% jump over July of last year. This is the first month that was higher than the 2003 levels since Jan-2004. For the year the number of workers laid off is -11% fewer than at this point in 2003. Manufacturing was again the leader with 42% of all the layoffs. This jump in announced layoffs does not bode well for the Jobs report on Friday. They are not directly connected but there is always some trending in play. The Chicago PMI came in at 57.3 and was significantly less than the expected 60.5. This has been a volatile number of late after posting a high for the year at 68.0 in May. It has been trending down for the last three months despite a spike in July. Production fell to 61.8 from 69.5 and New Orders fell more than -10 points to 58.0. Backorders fell -8.6 to 51.6. The most serious challenge was the nearly +10 point jump in the prices paid component to 86.6 and a 15 year high. This suggests that inflation is beginning to appear on a broader basis as high energy prices filter through the order flow pipeline. Inventory rose to the highest level for the year at 61.3 and when coupled with the huge drop in backorders suggests a further slowdown ahead. The PMI is important but its biggest claim to fame this week is as a leading indicator for the ISM due out tomorrow morning. If the ISM fell off as badly as the PMI then any future rally would have as much chance as a snowflake in August. The only upside to the PMI and possibly ISM slide is the potential for the Fed to back off their current rate hike program. Bonds have risen for the last several days on concerns that the economy is continuing to slow. Futures are now pricing in only one more hike before year end. The NY-NAPM posted another gain to 307.1 and although the gain was a minor +4.6 points it was another new high for the year. NYC continues to pull out of its 9/11 slump and conditions are still strong. However, the same problems are beginning to show in the NAPM as in the other manufacturing indexes. The current conditions component fell to 59.3 from 73.2 in July. The six-month outlook fell a whopping -18.5 points from 78.5 to only 60. While the headline number did post a minor gain the internals suggest this could be the last month for this index to set a new high. Odds are good we are about to see conditions in NYC follow the rest of the country into a pre election slump. We are quickly counting down the days until Intel updates its quarter on Thursday night. The dog pile continued today with multiple brokers downgrading not only Intel but semis in general. SG Cowen told investors to AVOID Intel and semis as a sector. They said slowing demand and increased supply in 2005 would depress earnings for the sector. According to SGC channel checks with Taiwan component makers suggests notebook sales were especially weak over the last month. Merrill Lynch told customers to avoid Intel despite the sharp dip in price. They think the current margin estimate of 60% is too high based on softness in multiple chip components. Flash memory, cell phone chips and processors are seeing some aggressive price cuts as suppliers fight for market share. In Intel's case AMD is still fighting the good fight and becoming a stronger competitor in the current price conscious markets. Morgan Stanley cut Intel saying current sluggish demand was going to result in "negative gross margin surprises" in the coming quarters. JPM cut Intel's revenue by -$100 million for the current quarter. Prudential said channel checks were showing the back to school bounce was later than normal and the inference was a weaker bounce as well. With all this negativity it is no wonder Intel dropped to a new 52-week low just under $21 before rebounding slightly to $21.28 at the bell. Surprisingly the SOX only lost -2.62 points or -0.7% to 370. This is only +10 points above the low for the year and could be very close to a double bottom forming. If the SOX can hold 360 and Intel does not trip on its announcement then year end relief may begin to appear. With all the analysts coming out publicly this close to the report Intel could surprise everyone by pulling a rabbit out of its hat. While I am not expecting it this would be very good for tech stocks struggling to hold over Nasdaq 1800. September is the weakest month of the year and many Labor Day rallies turn into jumping off points for the October lows. This has apparently attracted new cash into the market with $2.3 billion flowing into equity funds for the last two weeks according to TrimTabs.com. Considering the very light volume prior to today that cash was still setting on the sidelines in hopes of a real pullback to enter. We got the drop I was hoping for over the last two days and those hoping for an entry at the SPX 1095 I targeted in Sunday's commentary should be feeling better tonight. Low today was SPX 1094.72. The challenge with today's rebound is the way it transpired. Several buy programs hit back to back in the last 90 min of trading that helped the Dow rebound 90 points. This was clearly some month end window dressing by funds in an attempt to show less cash and more stocks on the books. Will it hold tomorrow? Obviously nobody knows but the general consensus of opinion was expecting a post convention bounce. Today's rebound could have stimulated buying interest but extreme anti-"Semi"tic (I know that means something else but it would work so well here) revulsion against chip stocks could impede any continued rally. The bearish case is the easiest to paint today. The PMI and NAPM suggest the ISM tomorrow could be ugly. There is also another possible nail in the semi coffin with semiconductor billings scheduled to be reported. Add that to the fear of Intel on Thursday and the next two days have far more negative potential than upside potential. This may just work in the bulls favor instead. All the bad news is already priced in with the two day pullback to strong support at SPX 985, Dow 10075 today. This profit taking deflated all the bullishness built into the market as of Friday and gave us a nice strong launch point for a potential post convention rally. They could not have scripted a better entry for the rest of the week. Stops have been cleared and sellers have exited the building. Of course a nasty ISM number could ripen a new crop of sellers in a heartbeat. The election factor appears to be working in the markets favor with Bush pulling slightly ahead in the polls but it is still anybody's race. Regardless of your party the markets have a history of gaining ground once the final gavel is heard at the Republican convention. That expectation could prompt some bargain hunting over the next two days were it not for the ISM, Intel and Jobs report hurdles. Just getting past the convention does not eliminate our event risk. Just ten hours after Bush speaks on Thursday night to close the convention the administration speaks on the state of employment with the August Jobs report. The consensus estimate is currently 150,000, up from 132,000 last week and the whisper numbers are starting to rise to challenge the 200K level. While a 150-200K number would be very positive for the market we are facing a greater potential for a monster disappointment. Should Intel warn and jobs disappoint we could go from the potential for a post convention, post Labor Day rally straight to new lows for the year. We have a very tense market situation just ahead. The next three days could set the tone for the next month. With Septembers historical trend as the worst month of the year the only thing for sure is it will not be a boring month. We will either see a bear-b-que as a contrarian rally emerges or we will head south at a high rate of speed in a dip that will produce the best buying opportunity for the year. Should a post convention rally miraculously appear amid the smoke and debris clouding our path it will run headlong into warning season in about two weeks. With Q3-2003 comps very tough the potential for a strong warning calendar is very high. According to those that track these things the number of positive announcements for Q3 are running well below the norm. We have not reached the point where we will start to see the stats on a daily basis but those days are coming. The only sure thing is a solid wall of worry ahead and a very rocky road to November. The general consensus from the stream of analysts parading by on CNBC is to be fully invested before Halloween. The post election rally is one of the most recognized trends, regardless of who wins although republican victories tend to produce the best results. Even without the election November is the best month of the year for the S&P and the second best for the Dow since 1950, 3rd for Nasdaq since 1971. This makes our road map very clear. We should be wary of any post convention bounce and keep looking for the normal end of September weakness when earnings warnings begin to appear. We should then use any Sept- Oct dip to establish longer-term positions. That may be far too much forward thinking for most traders just trying to find an entry/exit point for tomorrow but we need to always keep the long term roadmap in focus to help us plan our short term strategies. Right now I am just happy to see the dip to support at 1095/10075 and the strong rebound to clear the cobwebs. This provided the perfect setup for me and now all we need is a positive ISM to keep it alive. Did I mention that today's rebound failed to break the 100dma on the Dow at 10195? Nobody ever said the uphill road would be easy. Enter Passively, Exit Aggressively. Jim Brown Editor *************** FUTURES MARKETS *************** 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 ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** ***************** INDEX TRADER WRAP ***************** Dow, SPX, OEX finish month with gains, while NDX finds losses A late session lift had the Dow Industrials (INDU) 10,173.92 +0.50% posting a 51-point gain and that was good enough to have the world's most recognizable stock market benchmark finishing the month of August with a fractional 34-point gain. An ending session spat of buying, which had the look of some end of month painting of the ticker tap, also had the broader S&P 500 Index (SPX.X) 1,104.24 +0.46% posting a 2.5-point gain for the month, while its narrower brethren and the S&P 100 Index (OEX.X) 538.77 +0.41% managed to eek out a 1.10-point gain for August. While technology sectors reversed the bulk of their losses in today's session, the Semiconductor Index (SOX.X) 371.02 -0.7% finished down 2.6 points as brokers continued to caution ahead of Thursday's mid-quarter update from Intel (NASDAQ:INTC) $21.28 -1.48%, which did trade a new 52-week low. The SOX.X fell an additional 45 points, or 10.9% in August, adding to July's 68- point decline (-14.15%). The continued battering in the chips had the tech-heavy NASDAQ- 100 Index (NDX.X) 1,368.68 +0.05% falling 31 points in August, or 2.26%, after falling a more substantial 116 points, or 7.66% in July. U.S. Market Watch - 08/31/04 Close In tonight's U.S. Market Watch, I jotted down some of the conventional simple moving averages I and a lot of traders will use with PINK=21-day, BLUE=50-day and RED=200-day. Good gravy! The very broad NYSE Composite ($NYA.X) is challenging its 200-day SMA by today's close and while closing above this longer-term and still trending higher 200-day SMA on Friday, buyers have not yet been able to get a meaningful move back above. When we review tonight's Market Snapshot/Internals, my one thought here is that the bullish leadership may be getting a little over-extended and while new highs are growing and new lows are abating, buyers may be hesitant to push the envelope further. Remember the S&P Retail Index (RLX.X) 388.92 -0.13% and observations made as it has been battling with its 200-day SMA, where despite today's release of consumer confidence figures, held steady above all three simple moving average. I tell you what. The more I reflect on the rebound the major indices had from the 2002 lows and look at the AMEX Gold Bugs Index ($HUI.X) which has been showing some life of late, I can't help but think the hints of bullishness returning to this sector might not also be a "heads up" from the MARKET that some type of "reflation" for the economy is in the making. Since hitting a yield high of 4.904% in mid-May, the benchmark 10-year YIELD ($TNX.X) has fallen to a suspicious 4.132% yield. What's suspicious about this level is it is right where the benchmark bond's yield closed on April 2, 2004. That was the day the bond market was sent into a tail spin and Treasuries saw sharp selling when the March nonfarm payroll figures surged to a surprising 353,000. Market Snapshot / Internals - 08/31/04 Close The very broad NYSE hung tough for the bulk of the session with its A/D line never dipping into negative territory, and while volumes remained light, a little energy burst in the final hour of trade did have volume breaching the 1 billion-share mark, after two consecutive sessions of sub 1 billion volume. NASDAQ struggled throughout but after turning just over 100 million shares per hour, four and five-lettered stocks also got some buy side volume. Other than the first 30-minutes of today's trade, TRIN spent the bulk of today's session above 1.0. This makes two consecutive sessions above 1.0. Shorter-term traders might want to keep this in mind as TRIN gravitated back toward 1.0 from about 12:00 PM. Pivot Analysis Matrix - (New MONTHLY Pivot Levels) Today we update the MONTHLY Pivot matrix with new MONTHLY levels, where all equity-based indices close ABOVE their MONTHLY Pivot, which the Semiconductor Index (SOX.X) being the lone exception. We can really see the stagger in the WEEKLY Matrix where the SOX.X now lingers just BELOW its WEEKLY S1, the NDX/QQQ close right on their WEEKLY S1, with the majors (INDU, SPX, OEX) right around their weekly Pivots, as if positioned "neutral" into Friday's nonfarm payroll numbers. The S&P Banks Index (BIX.X) 362.28 +0.81% came within fractions of its March 5 all-time high of 362.64, but is first among the equity-based indices to get a trade at WEEKLY R1. S&P 500 Index (SPX.X) Chart - Daily Intervals With MONTHLY Pivot retracement redrawn, there's really little change at MONTHLY S2 and MONTHLY R1, but lowering of MONTHLY R2 has the MONTHLY Pivot (1,091.55) for September moving lower, where last month's (August) 61.8% retracement of 1,092.77 had been. I take note of this as a key level of near-term support. Today's close for the SPX looks rather bullish above a new "overlapping" level at 1,103, and overlap from last night's review of the SPX at 1,107 has vanished. Are computers exhausted for selling near-term? They seemed like it in the final hours of trade. With the NYSE Composite ($NYA.X) 6,454 +0.61% challenging its similarly rising 200-day SMA for a third-straight session, it has to be the technology components of the SPX holding it back. It certainly isn't the banks. Jeff Bailey **************** MARKET SENTIMENT **************** September Looms Large - J. Brown That's it! August 2004 is in the bag and if you're not the roller-coaster type then you're happy it's gone. Unfortunately, September looms large ahead of us but first let's look at what's weighing on investors' minds tonight. The economic data today was disappointing. The consumer confidence numbers slipped from 105.7 in July to 98.2 in August when economists were looking for a drop to 103.4. This is certainly not good news and not positive for the incumbent president. The Chicago PMI dropped from 64.7 in July to 57.3 in August. Estimates were for a drop to 60.8. Again, this is bad news. However, both are actually positive numbers. Confidence is relatively high and the PMI number, at 57, is still at an expanding or a growth rate. What these numbers show is that the economy is still growing but that growth is slowing. Of course you, me and everyone else paying attention already knew that. Crude oil continues to play a part in this great game on Wall Street. Currently the black liquid is down about $6.00 in the last week and a half. However, as mentioned before (either in this column or in the MarketMonitor) the $42 level, where oil is trading now, could be support. The $42 level in crude happens to be a 50% Fibonacci retracement level of its July to August rally. It wouldn't surprise me to see a short-term oversold bounce from here, which of course would weigh on stocks. Then again we could see oil drop to the psychological, round-number support level at $40.00 a barrel then I'd really be wary of an oversold bounce. Investors are also worried about Intel's mid-quarter update on Thursday night. If you consider the weakness in the SOX and in shares of Intel today then one can surmise that confidence is pretty low. This shouldn't be a surprise if you consider that Morgan Stanley, JPMorgan, Prudential and SG Cowen all said they expect Intel to warn and/or lower their revenue guidance. Currently estimates are for Intel to turn in Q3 revenues at $8.88 billion. Merrill Lynch said they expect Intel to affirm their revenue numbers but they're wisely cautious on the stock. If I remember correctly most of Wall Street was bearish before Intel's last mid-quarter update only to have Intel surprise and guide to the upper half of their previous guidance. Investors, whether they like it or not, also have to deal with the Republican National Convention. The current logic dictates that Wall Street, besides being widely Republican, would rather have an incumbent stay in office merely to avoid the uncertainty factor. The market hates uncertainty. Considering that a number of polls seem to have Bush making some headway against his rival Kerry could almost be considered bullish for stocks. As long as the convention survives without any terrorist event this four-day pep rally might improve investor sentiment if it can cement any kind of lead for Bush if you follow the Wall Street loves the incumbent logic. This week is not without more risk. On top of exceptionally low trading volume, since most of Wall Street took the week off to avoid the traffic jams and security delays due to the RNC, we also have to deal with a parade of economic data. Tomorrow brings the construction spending numbers and the ISM manufacturing index. Economists are looking for the ISM to fall from 62.0 in July to 60.0 in August. Any number above 50 shows expansion and growth. Friday is the big non-farm payrolls (jobs) report, which could be a major influence on stock direction. Plus, we have to deal with seasonally weak trends in September. Historically it is the worst month of the year for stocks. Currently, September has been a loser for five years in a row. That's not a good record to be trading calls against. However, short-term the beginning of September and the post-Labor Day week tend to be positive. A lot of folks have been saying there is no reason to buy stocks until after Labor day. Well the holiday is almost here. Are investors going to come back with their wallets open or closed? ----------------------------------------------------------------- Market Averages DJIA ($INDU) 52-week High: 10753 52-week Low : 9233 Current : 10173 Moving Averages: (Simple) 10-dma: 10125 50-dma: 10136 200-dma: 10257 S&P 500 ($SPX) 52-week High: 1163 52-week Low : 983 Current : 1104 Moving Averages: (Simple) 10-dma: 1099 50-dma: 1102 200-dma: 1111 Nasdaq-100 ($NDX) 52-week High: 1559 52-week Low : 1280 Current : 1368 Moving Averages: (Simple) 10-dma: 1372 50-dma: 1400 200-dma: 1440 ----------------------------------------------------------------- CBOE Market Volatility Index (VIX) = 15.29 –0.15 CBOE Mkt Volatility old VIX (VXO) = 14.98 -0.13 Nasdaq Volatility Index (VXN) = 21.92 -0.22 ----------------------------------------------------------------- Put/Call Ratio Call Volume Put Volume Total 0.71 529,841 375,877 Equity Only 0.58 376,647 221,352 OEX 1.33 14,608 19,534 QQQ 2.32 11,792 27,375 ----------------------------------------------------------------- Bullish Percent Data Current Change Status NYSE 55.3 + 0 Bear Confirmed NASDAQ-100 32.0 + 0 Bear Confirmed Dow Indust. 46.6 + 0 Bear Confirmed S&P 500 51.4 + 0 Bear Confirmed S&P 100 49.0 + 0 Bear Confirmed Bullish percent measures the number of stocks in an index currently trading on a buy signal on their point and figure chart. Readings above 70 are considered overbought, and readings below 30 are considered oversold. Bull Confirmed - Aggressively long Bull Alert - Cautiously long Bull Correction - Pause or pullback in upward trend Bear Alert - Take defensive action if long Bear Confirmed - High risk if long, good conditions for shorting Bear Correction - Pause or rebound in downtrend ----------------------------------------------------------------- 5-dma: 1.37 10-dma: 1.13 21-dma: 1.32 55-dma: 1.28 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 1950 1765 Decliners 884 1211 New Highs 106 37 New Lows 19 34 Up Volume 939M 523M Down Vol. 443M 694M Total Vol. 1392M 1292M M = millions ----------------------------------------------------------------- Commitments Of Traders Report: 08/24/04 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 Commercials have upped both their longs and shorts but remain net bearish. Small traders have upped their shorts and pared back their longs a bit but remain net bullish. Commercials Long Short Net % Of OI 08/03/04 401,619 419,429 (17,810) (2.2%) 08/10/04 397,576 419,734 (22,158) (2.7%) 08/17/04 398,472 416,109 (17,637) (2.2%) 08/24/04 402,599 420,478 (17,879) (2.2%) 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 08/03/04 128,510 88,833 39,677 18.3% 08/10/04 135,689 93,897 41,792 18.2% 08/17/04 138,550 97,792 40,758 17.2% 08/24/04 135,151 100,351 34,800 14.7% Most bearish reading of the year: (1,657)- 5/27/03 Most bullish reading of the year: 114,510 - 3/26/02 E-MINI S&P 500 Commercial traders have decreased their longs and increased their shorts, which could be bad news for the S&P 500. In lockstep mirror-like fashion small traders are moving the opposite direction than the "smart money". Commercials Long Short Net % Of OI 08/03/04 340,053 428,736 ( 88,683) (11.5%) 08/10/04 369,547 441,055 ( 71,508) ( 8.8%) 08/17/04 404,065 457,372 ( 53,307) ( 6.2%) 08/24/04 392,065 473,911 ( 81,846) ( 9.4%) 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 08/03/04 195,105 68,717 126,388 47.9% 08/10/04 179,940 89,239 90,701 33.7% 08/17/04 192,939 92,361 100,578 35.3% 08/24/04 211,995 76,184 135,811 47.1% Most bearish reading of the year: (77,385) - 09/02/03 Most bullish reading of the year: 449,310 - 06/10/03 NASDAQ-100 Commercial traders have added to both their shorts and longs but the end result was an increase in bullish sentiment on the NDX. Small traders are also bullish but have cut their enthusiasm in half. In essence small traders are beginning to turn bearish, which in a contrarian sense is bullish. Confused yet? Commercials Long Short Net % of OI 08/03/04 42,771 36,863 5,908 7.4% 08/10/04 43,968 38,351 5,617 6.8% 08/17/04 44,743 41,535 3,208 3.7% 08/24/04 48,624 43,222 5,402 5.8% Most bearish reading of the year: (21,858) - 08/26/03 Most bullish reading of the year: 25,160 - 06/01/04 Small Traders Long Short Net % of OI 08/03/04 8,995 13,901 (4,906) (21.4%) 08/10/04 10,081 10,858 ( 777) ( 3.7%) 08/17/04 12,256 8,352 3,904 18.9% 08/24/04 11,666 10,068 1,598 7.3% Most bearish reading of the year: (20,270) - 06/01/04 Most bullish reading of the year: 19,088 - 01/21/02 DOW JONES INDUSTRIAL Commercial traders remain bullish but have pared back their longs a bit. Meanwhile small traders remain bearish but have also hedged their enthusiasm a bit. Commercials Long Short Net % of OI 08/03/04 30,118 25,029 5,089 9.2% 08/10/04 30,634 22,994 7,640 14.2% 08/17/04 30,271 22,809 7,462 14.1% 08/24/04 28,919 23,658 5,261 10.1% Most bearish reading of the year: (8,322) - 1/16/01 Most bullish reading of the year: 15,135 - 10/16/01 Small Traders Long Short Net % of OI 08/03/04 4,325 5,212 ( 887) ( 9.3%) 08/10/04 6,450 8,488 (2,038) (13.6%) 08/17/04 4,388 7,089 (2,701) (23.5%) 08/24/04 5,052 7,214 (2,162) (17.6%) Most bearish reading of the year: (12,106) - 3/09/04 Most bullish reading of the year: 8,523 - 8/26/03 ************************Advertisement************************* Full Service Brokers Man Financial announces the formation of the OneStopOption Brokerage Group, addressing the demand for personalized, experienced service for both securities* and futures trading within the same firm. Licensed Option Principals Andrew Aronson and Alan Knuckman specialize in live assistance of stock*, option* and futures traders. 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The Option Investor Newsletter Tuesday 08-31-2004 Copyright 2004, All rights reserved. 2 of 3 Redistribution in any form strictly prohibited. In Section Two: Dropped Calls: POT Dropped Puts: None Call Play Updates: AET, BOL, FMC, FO, MHK, PD, RAI, TDS, ZBRA New Calls Plays: AHC, DGX Put Play Updates: SPW, New Put Plays: IVGN **************** PICKS WE DROPPED **************** When we drop a pick it doesn't mean we are recommending a sell on that play. Many dropped picks go on to be very profitable. We drop a pick because something happened to change its profile. News, price, direction, etc. We drop it because we don't want anyone else starting a new play at that time. We have hundreds of new readers with each issue who are unfamiliar with the previous history for that pick and we want them to look at any current pick as a valid play. CALLS: ***** Potash - POT - close: 55.52 change: +1.75 stop: 51.00 Ding! We're done. Shares of POT have exceeded our expectations. Our target was $55.00 (actually $54.90) and the stock soared to $55.85 this afternoon on rising volume. At this point we're willing to take the money and run. If you're feeling more aggressive we suggest significantly tightening your stops to protect a majority of the recent climb (like under $54). Picked on August 10th at $ 51.08 Change since picked: + 4.44 Earnings Date 07/29/04 (confirmed) Average Daily Volume = 180 thousand Chart = PUTS: ***** None ************************Advertisement************************* Full Service Brokers Man Financial announces the formation of the OneStopOption Brokerage Group, addressing the demand for personalized, experienced service for both securities* and futures trading within the same firm. Licensed Option Principals Andrew Aronson and Alan Knuckman specialize in live assistance of stock*, option* and futures traders. The combination of the proven Man Financial global presence and the convenience of one group for all trading needs provide customers with the tools needed for success. Live Broker and Online Trading Available 888-281-9569 http://www.OneStopOption.com ************************************************************** ******************** PLAY UPDATES - CALLS ******************** Aetna - AET - close: 92.65 change: +0.53 stop: 89.95 Insurance stock AET continues to consolidate in a tight $1.00 range. The good news is this trading range has a slightly bullish, higher-lows trend to it. We're also encouraged that yesterday's earnings warning from ACDO didn't affect shares of AET. We continue to suggest either a bounce from $90.00 or a breakout over $95.00 as an entry point for our target at $100. Picked on August 15th at $90.72 Change since picked: + 1.93 Earnings Date 07/29/04 (confirmed) Average Daily Volume = 1.4 million Chart = --- Bausch Lomb - BOL - close: 65.95 change: +0.66 stop: 62.50 We are still not triggered yet in BOL but the sideways consolidation is holding above support at the $65.00 level and that's good news. Today's afternoon rebound is encouraging but we're willing to wait on the sidelines for BOL to breakout and hit our trigger at $66.51. Picked on August xxth at $xx.xx <-- see TRIGGER Change since picked: + 0.00 Earnings Date 07/29/04 (confirmed) Average Daily Volume = 397 thousand Chart = --- F M C Corp - FMC - close: 46.23 change: +0.98 stop: 42.00 Bullish traders can be encouraged that support at the $45.00 level and its simple, rising 10-dma held its first test. Shares of FMC churned mostly sideways on Tuesday until the afternoon rally and that's when the stock took off. This looks like an entry point for new bullish positions. Picked on August 24 at $45.87 Change since picked: + 0.36 Earnings Date 07/27/04 (confirmed) Average Daily Volume = 265 thousand Chart = --- Fortune Brands - FO - close: 73.15 change: +0.27 stop: 71.50 Our recently added call play in FO has gotten off to a slow start. Shares of FO backtracked on Monday and the afternoon bounce during the Tuesday afternoon rally wasn't that inspiring. The good news is that support at the $72.00 level and its simple 200-dma held up during yesterday's weakness and this morning's dip. However, we're now more inclined than before to suggest buying a new high over $74.35 or even the $75.00 mark. Picked on August 29th at $74.08 Change since picked: - 0.93 Earnings Date 07/23/04 (confirmed) Average Daily Volume = 636 thousand Chart = --- Mohawk Industries - MHK - close: 76.92 change: +0.40 stop: 73.00 MHK was due for some profit taking and we saw some on Monday. Honestly, we're surprised the profit taking wasn't a little steeper. MHK managed a weak bounce from the $46.50 level today on strong volume. We're happy to report most of the volume came in during the afternoon bounce. Picked on August 24th at $75.51 Change since picked: + 1.41 Earnings Date 07/21/04 (confirmed) Average Daily Volume = 397 thousand Chart = --- Phelps Dodge - PD - close: 81.56 chg: -0.25 stop: 77.00 We're surprised to see PD slipping lower when gold and copper prices are ticking higher. It's possible that we're seeing investor reaction to PD losing a bid for Peru's Las Bambas copper reserves, which went to a Swiss rival. Then again it could be some minor profit taking and bullish traders may want to use the dip back toward $81.00 as an entry point for new positions. Picked on August 26th at $82.10 Change since picked: - 0.54 Earnings Date 07/27/04 (confirmed) Average Daily Volume = 2.1 million Chart = --- Reynolds American - RAI - cls: 75.50 chg: +0.72 stop: 71.95*new* Our tobacco play is smoking! The stock is up four days in a row after bouncing from the $72.00 level. More importantly to technical players the stock has broken out above resistance at $75.00 to hit new highs on rising, above average volume. This is very bullish news. Remember that our target was the $77.50-80.00 range and we're getting close to the lower boundary. We'll raise our stop loss to $71.95. Picked on August 19 at $72.88 Change since picked: + 2.62 Earnings Date 08/02/04 (confirmed) Average Daily Volume = 1.2 million Chart = -- Telephone & Data Sys - TDS - cls: 77.10 change: +0.80 stop: 74.00 TDS has been a test of patience for us and the stock is still stuck inside its trading range. Fortunately, the good news today is that shares bounced from the $76.00 level on decent volume. This could be a bullish entry point but since we're feeling cautious we'd prefer to only consider new plays on a move over $78.00. If we don't see some action soon we're going to drop TDS and move on. Picked on August 24th at $78.05 Change since picked: - 0.95 Earnings Date 07/21/04 (confirmed) Average Daily Volume = 195 thousand Chart = --- Zebra Tech. - ZBRA - close: 57.15 chg: +0.90 stop: 53.99 ZBRA experienced some profit taking on Monday but shares held support at the $56.00 level. Fortunately, that level held again this morning and when the afternoon rally began ZBRA joined in. Coincidentally it happens to be a test of its rising, simple 10- dma. This could be a new bullish entry point for traders but remember we're targeting a run to $60.00. Picked on August 25th at $56.18 Change since picked: + 0.97 Earnings Date 07/28/04 (confirmed) Average Daily Volume = 419 thousand Chart = ************** NEW CALL PLAYS ************** Amerada Hess - AHC - close: 80.50 chg: +1.45 stop: 77.00 Company Description: Amerada Hess Corporation is a leading global independent energy company, engaged in the exploration and production of crude oil and natural gas, as well as in refining and in marketing refined petroleum products, natural gas, and electricity. (source: company website) Why We Like It: Plain and simple we like AHC for its relative strength and bullish technical breakout over resistance. We've had our eye on the oil/oil service stocks the last several days as they started to turn around and bounce from their August lows despite the drop in crude prices. This looks like investors jumping back in after some early August profit taking. The technical oscillators are bullish on AHC and its MACD has produced a new "buy" signal from oversold. We like the breakout over its simple 21, 40 and 50- dma's and round-number, psychological resistance at the $80.00 mark. Unfortunately, P&F chart traders will note that AHC is still in a sell signal so the play is not without some risk here. It's also interesting to note that AHC is also an oil refiner and the industry is currently running at about 96 percent capacity. Furthermore the industry as a whole is expected to see smaller and shorter maintenance shut-downs this fall as they have in the past. Since oil is still above $40 a barrel that means hefty profits! We're going to target a quick run toward the $85.00 mark but it wouldn't surprise us to see AHC climb higher. Suggested Options: We like the October and November strikes. Our favorites would be the 75s and 80s. BUY CALL OCT 75 AHC-JO OI=615 current ask $6.50 BUY CALL OCT 80 AHC-JP OI=238 current ask $3.20 BUY CALL OCT 85 AHC-JQ OI= 57 current ask $1.30 BUY CALL NOV 80 AHC-KP OI=1255 current ask $4.40 BUY CALL NOV 85 AHC-KQ OI= 794 current ask $2.30 Annotated Chart: Picked on August 31st at $80.50 Change since picked: + 0.00 Earnings Date 07/28/04 (confirmed) Average Daily Volume = 1.0 million Chart = --- Quest Diagnostic - DGX - close: 85.60 chg: +2.18 stop: 82.00 Company Description: Quest Diagnostics Incorporated is the nation's leading provider of diagnostic testing, information and services, providing insights that enable healthcare professionals to make decisions that improve health. The company offers the broadest access to diagnostic testing services through its national network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff. Quest Diagnostics is the leading provider of esoteric testing, including gene-based medical testing, and provides advanced information technology solutions to improve patient care. Quest Diagnostics' healthcare information technology subsidiary, MedPlus, is a leading developer and integrator of clinical connectivity and data management solutions for healthcare organizations and clinicians. (source: company press release) Why We Like It: We recently had DGX on the Sunday watch list. What we said was watch for a bullish breakout over resistance at the $85.00 level. Should this occur traders could target a run toward the $90.00 region. DGX did just that today with a high-volume (well at least above average volume) breakout over the $85.00 mark. Short-term technicals like the RSI and stochastics are bullish and the P&F chart is in a bullish buy signal with a $96 price target (it was $93 on Sunday). We're willing to speculate on the technical breakout with a short-term run toward $90. Suggested Options: We're going to suggest the October or November calls. Our favorites are the 80s and 85s. BUY CALL OCT 80 DGX-JP OI=360 current ask $6.80 BUY CALL OCT 85 DGX-JQ OI=137 current ask $3.20 BUY CALL OCT 90 DGX-JR OI=208 current ask $1.10 BUY CALL NOV 85 DGX-KQ OI=1742 current ask $4.40 BUY CALL NOV 90 DGX-KR OI=1163 current ask $2.10 Annotated Chart: Picked on August 31st at $85.60 Change since picked: + 0.00 Earnings Date 07/22/04 (confirmed) Average Daily Volume = 578 thousand Chart = ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** ******************* PLAY UPDATES - PUTS ******************* SPX Corp - SPW - close: 36.49 change: -0.28 stop: 38.26 Once more we can only report that SPW continues to consolidate lower. The stock has built yet another lower high under the descending 21-dma. We don't want to give up yet and since we're not triggered yet it's only costing us patience. We're suggesting readers buy puts if SPW breaks support at $36.00 and hits our trigger at $35.75. Picked on August xxth at $xx.xx <-- see TRIGGER Change since picked: - 0.00 Earnings Date 08/02/04 (confirmed) Average Daily Volume = 814 thousand Chart = ************* NEW PUT PLAYS ************* Invitrogen - IVGN - close: 49.50 change: -0.67 stop: 51.51 Company Description: Invitrogen Corporation provides products and services that support academic and government research institutions and pharmaceutical and biotech companies worldwide in their efforts to improve the human condition. The company provides essential life science technologies for disease research, drug discovery, and commercial bio-production. Invitrogen's own research and development efforts are focused on breakthrough innovation in all major areas of biological discovery including functional genomics, proteomics, bioinformatics and cell biology -- placing Invitrogen's products in nearly every major laboratory in the world. Founded in 1987, Invitrogen is headquartered in Carlsbad, California and conducts business in more than 70 countries around the world. The company globally employs approximately 4,000 scientists and other professionals. (source: company press release) Why We Like It: This has been a relatively tough market for the bears lately. The last two weeks of August have seen a widespread market bounce. Fortunately, we think we've found a decent candidate for put buyers. IVGN got crushed in July when it disappointed investors in its earnings report. There was no oversold bounce and the stock broke through the $50.00 level in early August when the market was dropping. We did see some oversold back back toward $50.00 but now after two weeks of churning mostly sideways the trend of lower highs and lower lows has set IVGN up for another drop. Short-term technicals are looking weak and its MACD is very close to a new "sell" signal. The P&F chart is very bearish with a $27.00 price target. We're going to target an initial drop to $45.00. However, we're going to use a TRIGGER at $48.95 to open the play. Until IVGN trades under $49.00 and hits our trigger we'll sit on the sidelines. If triggered we'll try and keep our risk to a minimum with a stop at $51.51. Suggested Options: We like the October and November puts. Our favorites are the 55s, 50s, 47.50s and 45s. BUY PUT OCT 55.00 IUV-VK OI= 5 current ask $6.40 BUY PUT OCT 50.00 IUV-VJ OI=17 current ask $3.00 BUY PUT OCT 47.50 IUV-VW OI=55 current ask $1.90 BUY PUT OCT 45.00 IUV-VI OI=53 current ask $1.20 BUY PUT NOV 50.00 IUV-WJ OI=488 current ask $3.90 BUY PUT NOV 47.50 IUV-WW OI=489 current ask $2.80 BUY PUT NOV 45.00 IUV-WI OI=104 current ask $1.95 Annotated Chart: Picked on September xth at $xx.xx <-- see TRIGGER Change since picked: - 0.00 Earnings Date 07/21/04 (confirmed) Average Daily Volume = 1.3 million Chart = ************************Advertisement************************* No time to follow the Market Monitor? Tired of missing good Trades because you stepped away from your computer? OneStopOption Group can follow the Market Monitor for you. You choose the number of contracts, we take care of the rest!! Trade Stock Options, Stocks and ALL Futures with the same Group. Call us 888 281-9569 to see if you qualify to have us rebate your subscription cost. http://www.OneStopOption.com ************************************************************** ********** DISCLAIMER ********** Please read our disclaimer at: http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html ************************************************************** ADVERTISING INFORMATION For more information on advertising in OptionInvestor Newsletter, or any Premier Investor Network newsletter please contact: Contact Support
The Option Investor Newsletter Tuesday 08-31-2004 Copyright 2004, All rights reserved. 3 of 3 Redistribution in any form strictly prohibited. In Section Three: Watch List: Insurance, Mortgages and more! Spreads & Straddles: A Nice Comeback For Stocks! Premium Selling Plays: Naked Puts & Calls ********** WATCH LIST ********** Insurance, Mortgages and more! ___________________________________________________________________ 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. ___________________________________________________________________ Ambac Financial - ABK - close: 75.50 change: +0.64 WHAT TO WATCH: ABK has produced an impressive rally in August. The stock has run from under $70.00 to the $75.00 region. At that point the rally began to stall but now shares are breaking out to new four-month highs. Unfortunately, there's been no volume to back up the move. The P&F chart is bullish with a triple-top breakout buy signal and an $86 price target. This could be an aggressive players entry point - just use a tight stop. Chart= --- New Century Financial - NCEN - close: 53.64 change: +0.67 WHAT TO WATCH: We watched mortgage lender NCEN breakout over the $50.00 level in mid-August and run to round-number resistance at $55.00. Now shares have slipped back a bit in profit taking but traders bought the dip at $52.00 today. This also happens to be a test of its simple 10-dma and old resistance back in January and March. We see this as an aggressive entry point for bullish positions. The P&F chart shows a triple-top breakout buy signal with a $70 target. Chart= --- Vimpel Communications - VIP - close: 98.10 change: +2.45 WHAT TO WATCH: Russian telecom stock VIP once again makes the watch list. The stock has rallied strongly in August to breakout above all its moving averages. Shares are now challenging round- number, psychological resistance at the $100.00 mark. If VIP can breakout over $100 aggressive traders can target a run toward $110. The bullish P&F chart points to a $120 price target. Chart= ----------------------------------- RADAR SCREEN - more stocks to watch ----------------------------------- KO $44.71 +0.36 - We like the bullish trend of higher lows but it also looks like a bearish wedge-pattern. Consider longs over $45.00 or shorts under $44.00. CCU $33.51 -0.69 - Uh-oh, CCU has broken support at $34.00 on big volume. The next stop could be $30.00 but approach cautiously. The P&F target has already been achieved. ************************Advertisement************************* Live Securities Brokerage Service with Licensed Option Principals OCO Stop & Profit Orders OneStopOption All types of Spreads and Buy Writes 888-281-9569 Auto-Trade Market Monitor Signals Personal Service and Education **Services available for Foreign Traders including Canada** http://www.OneStopOption.com ************************************************************** ******************* SPREADS & STRADDLES ******************* A Nice Comeback For Stocks! By Ray Cummins The major equity averages rebounded in late-session trading Tuesday, closing higher despite a sharp decline in consumer confidence. The Dow Jones Industrial Average finished 51 points higher at 10,173, recovering nearly 100 points from its intraday low on solid performances by oil, drug and financial components. The NASDAQ Composite clawed its way back from a 17 point deficit to end slightly in the green at 1,838. The S&P 500 Index closed up 5 points at 1,104, on strength in oil & gas drilling, gold, housing, utility, and health stocks. Volume was 1.14 billion shares on the New York Stock Exchange while 1.2 billion shares crossed on the NASDAQ. Winners outnumbered losers more than 2 to 1 on the Big Board, but the ratio was slightly less bullish on the technology exchange at 3 to 2. Treasury prices climbed, driving yields to four-month lows. The benchmark 10-year note closed up 12/32 at 100 30/32 to yield 4.13%, a level not seen since early April. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SUMMARY OF CURRENT POSITIONS - AS OF 08/29/04 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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 Stock Pick Last Mon L/P S/P Credit CB G/L Status FRE 65.04 66.37 SEP 55.0 60.0 0.40 59.60 0.40 Open FPL 67.73 68.55 SEP 60.0 65.0 0.45 64.55 0.45 Open MCO 67.33 68.52 SEP 60.0 65.0 0.65 64.35 0.65 Open BSTE 44.14 46.94 SEP 35.0 40.0 0.55 39.45 0.55 Open ISCA 53.40 52.98 SEP 45.0 50.0 0.55 49.45 0.55 Open LEND 33.89 38.36 SEP 25.0 30.0 0.60 29.40 0.60 Open PIXR 69.93 76.00 SEP 60.0 65.0 0.45 64.55 0.45 Open PD 80.77 82.89 SEP 65.0 70.0 0.40 69.60 0.40 Open RYL 86.01 88.25 SEP 75.0 80.0 0.65 79.35 0.65 Open FRO 40.05 38.00 SEP 30.0 35.0 0.60 34.40 0.60 Open NIHD 37.59 36.52 SEP 33.4 35.0 0.20 34.80 0.20 Open NCEN 53.10 54.13 SEP 45.0 50.0 0.60 49.40 0.60 Open SEPR 49.35 50.99 SEP 42.5 45.0 0.30 44.70 0.30 Open L/P = Long Put S/P = Short Put CB = Cost Basis G/L = Gain/Loss CALL-CREDIT SPREADS Stock Pick Last Mon L/C S/C Credit CB G/L Status PDCO 73.40 74.90 SEP 85.0 80.0 0.55 80.55 0.55 Open CDWC 59.25 60.09 SEP 65.0 60.0 0.45 60.45 0.36 Open BGG 69.80 75.96 SEP 80.0 75.0 0.45 75.45 (0.51) Open? DNA 44.23 49.90 SEP 52.5 50.0 0.35 50.35 0.35 Open? EASI 43.53 42.79 SEP 55.0 50.0 0.40 50.40 0.40 Open VLO 64.36 66.04 SEP 75.0 70.0 0.60 70.60 0.60 Open FD 44.60 45.00 SEP 50.0 47.5 0.30 47.80 0.30 Open PHS 32.42 32.47 SEP 37.5 35.0 0.30 35.30 0.30 Open GDT 56.26 60.40 SEP 65.0 60.0 0.60 60.60 0.20 Open? OSTK 31.03 32.58 SEP 40.0 35.0 0.60 35.60 0.60 Open L/C = Long Call S/C = Short Call CB = Cost Basis G/L = Gain/Loss Briggs & Stratton (NYSE:BGG), Guidant (NYSE:GDT) and Genentech (NYSE:DNA) are on the early-exit list. Kmart (NASDAQ:KMRT) and Vimple Communications (NYSE:VIP) were previously closed in order to limit potential losses. DEBIT STRADDLES Stock Pick Last Exp. Long Long Initial Max Play Symbol Price Price Month Call Put Debit Value Status DITC 17.97 21.84 SEP 17.5 17.5 3.00 5.50 Open? Our new straddle in Ditech (NASDAQ:DITC) was a "big winner" last week as the issue jumped over $4 on a strong earnings report and the announcement of two additional customers in Asia. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ BULLISH PLAYS - CREDIT SPREADS These candidates are based on the underlying issue's technical history or trend. The probability of profit in these positions may also be higher than other plays in the same strategy, due to small disparities in option pricing however, each play should be evaluated for portfolio suitability and reviewed with regard to your strategic approach and trading style. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ MUR - Murphy Oil $75.51 *** Sector Rally! *** Murphy Oil Corporation (NYSE:MUR) is a worldwide oil and gas exploration and production company with refining and marketing operations in the United States and the United Kingdom. The firm's operations are classified into two business activities: Exploration and Production; and Refining and Marketing. Murphy's principal exploration and production activities are conducted in the United States, Ecuador and Malaysia by wholly owned Murphy Exploration & Production Company and its subsidiaries; in western Canada and offshore eastern Canada by wholly owned Murphy Oil and its subsidiaries; and in the U.K. North Sea and Atlantic Margin by wholly owned Murphy Petroleum Limited. Murphy Oil USA, Inc., a wholly owned subsidiary, owns and operates refineries in the United States. MUR - Murphy Oil $75.51 PLAY (conservative - bullish/credit spread): BUY PUT OCT-65.00 MUR-VM OI=937 ASK=$0.45 SELL PUT OCT-70.00 MUR-VN OI=335 BID=$1.10 INITIAL NET-CREDIT TARGET=$0.70-$0.75 POTENTIAL PROFIT(max)=16% B/E=$69.30 __________________________________________________________________ RYL - The Ryland Group $88.15 *** Homebuilder Extraordinaire! *** The Ryland Group (NYSE:RYL) is a homebuilder and mortgage-finance company. The company has built more than 200,000 homes during its 35-year history. Ryland homes are available in more than 275 new communities in many markets across the United States. In addition, the Ryland Mortgage company has provided mortgage financing and related services for thousands of homebuyers. The company's major operations span all the significant aspects of the home-buying process, from design, construction and sale to mortgage financing, title insurance, settlement, escrow and homeowners insurance. RYL - The Ryland Group $88.15 PLAY (conservative - bullish/credit spread): BUY PUT OCT-75.00 RYL-VO OI=13 ASK=$1.00 SELL PUT OCT-80.00 RYL-VP OI=42 BID=$1.65 INITIAL NET-CREDIT TARGET=$0.75-$0.80 POTENTIAL PROFIT(max)=17% B/E=$79.25 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ AZO - Autozone $74.06 *** Downtrend Intact! *** AutoZone (NYSE:AZO) is a specialty retailer of automotive parts and accessories primarily to do-it-yourself customers. The company operates auto parts stores in the United States and in Mexico and sells parts and accessories online at autozone.com. Each store carries an extensive product line for cars, vans and light trucks, including new and remanufactured automotive parts, maintenance items and various accessories. AutoZone also has a commercial sales program in the United States, AZ Commercial, which provides commercial credit and prompt delivery of parts to local, regional and national repair garages, dealers and service stations. In addition, the company sells automotive diagnostic and repair software through ALLDATA and through alldatadiy.com. AZO - Autozone $74.06 PLAY (more conservative - bearish/credit spread): BUY CALL OCT-85.00 AZO-JQ OI=91 ASK=$0.20 SELL CALL OCT-80.00 AZO-JP OI=101 BID=$0.70 INITIAL NET-CREDIT TARGET=$0.55-$0.65 POTENTIAL PROFIT(max)=12% B/E=$80.55 __________________________________________________________________ RIMM - Research In Motion $60.22 *** Premium-Selling Only! *** Research In Motion (NASDAQ:RIMM) is a designer, manufacturer and seller of wide area wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, the firm provides platforms and solutions for seamless access to time-sensitive information including e-mail, phone, short message service messaging, as well as Internet and intranet-based corporate data applications. RIMM - Research In Motion $60.22 PLAY (less conservative - bearish/credit spread): BUY CALL SEP-70.00 RUP-IN OI=5744 ASK=$0.20 SELL CALL SEP-67.50 RUP-IU OI=7130 BID=$0.40 INITIAL NET-CREDIT TARGET=$0.25-$0.30 POTENTIAL PROFIT(max)=11% B/E=$67.75 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ STRADDLES AND STRANGLES ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Based on analysis of the historical option pricing and technical background, these positions meet the fundamental criteria for favorable volatility-based plays. __________________________________________________________________ No straddles or strangles today... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SEE DISCLAIMER - SECTION 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ***************************************** 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 08/29/04 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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 IVX SEP 16.00 15.64 19.69 0.36 5.52% 2.30% MCIP SEP 15.00 14.30 17.71 0.70 8.50% 4.90% PAAS SEP 12.50 12.05 14.73 0.45 6.87% 3.73% UTHR SEP 25.00 24.70 31.99 0.30 3.01% 1.21% AMED SEP 25.00 24.25 25.92 0.75 6.54% 3.09% PHM SEP 50.00 49.25 59.30 0.75 3.32% 1.52% KOSP SEP 30.00 29.25 37.72 0.75 5.48% 2.56% GLBCE SEP 12.50 11.90 16.45 0.60 11.90% 5.04% ECLP SEP 12.50 12.10 14.37 0.40 6.90% 3.31% OMM SEP 12.50 12.10 13.30 0.40 6.51% 3.31% CNCT SEP 25.00 24.10 26.05 0.90 7.11% 3.73% TOY SEP 15.00 14.45 16.38 0.55 7.51% 3.81% ACF SEP 20.00 19.25 21.15 0.75 7.16% 3.90% PLMO SEP 30.00 29.45 38.25 0.55 5.05% 1.87% ION SEP 25.00 24.50 26.48 0.50 4.17% 2.04% ESLT SEP 20.00 19.20 21.70 0.80 7.95% 4.17% WBSN SEP 35.00 33.75 39.56 1.25 8.46% 3.70% NTMD SEP 12.50 12.15 18.28 0.35 8.12% 2.88% UTHR SEP 25.00 24.30 31.99 0.70 7.30% 2.88% CNCT SEP 25.00 24.30 26.05 0.70 6.65% 2.88% DDS SEP 20.00 19.50 20.20 0.50 6.31% 2.56% MEE SEP 22.50 22.00 27.94 0.50 5.93% 2.27% FOSL SEP 25.00 24.35 28.75 0.65 5.95% 2.67% HUM SEP 17.50 17.10 18.99 0.40 5.34% 2.34% SCSC SEP 50.00 49.40 61.51 0.60 3.30% 1.21% JOSB SEP 24.00 23.52 28.06 0.48 5.27% 2.04% ECLP SEP 12.50 12.20 14.37 0.30 6.57% 2.46% WBSN SEP 35.00 34.05 39.56 0.95 7.44% 2.79% ARO SEP 30.00 29.05 33.75 0.95 7.67% 3.27% MW SEP 25.00 24.60 28.74 0.40 4.22% 1.63% TOL SEP 40.00 39.05 44.38 0.95 6.19% 2.43% SEAC SEP 15.00 14.40 15.75 0.60 12.11% 4.17% CLHB SEP 10.00 9.60 11.62 0.40 10.87% 4.17% NTMD SEP 15.00 14.65 18.28 0.35 8.62% 2.39% ESLT SEP 20.00 19.20 21.70 0.80 10.61% 4.17% MYGN SEP 15.00 14.55 16.01 0.45 8.06% 3.09% NAVR SEP 12.50 12.15 15.07 0.35 9.14% 2.88% IVX SEP 18.00 17.56 19.69 0.44 7.02% 2.51% UTHR SEP 25.00 24.40 31.99 0.60 8.89% 2.46% AAPL SEP 30.00 29.50 34.35 0.50 5.37% 1.69% ARO SEP 30.00 29.50 33.75 0.50 5.51% 1.69% SONO SEP 22.50 22.05 24.66 0.45 6.40% 2.04% ESLT SEP 20.00 19.30 21.70 0.70 10.92% 3.63% MEE SEP 25.00 24.45 27.94 0.55 7.13% 2.25% SRDX SEP 22.50 21.90 24.10 0.60 8.40% 2.74% IVX SEP 18.00 17.52 19.69 0.48 8.94% 2.74% BSTE SEP 45.00 44.45 46.94 0.55 4.16% 1.24% FCN SEP 17.50 17.05 17.75 0.45 7.56% 2.64% Special Tuesday Note: PalmOne (NASDAQ:PLMO) shares plunged 10% Tuesday, possibly reacting to speculation that Nokia may unveil a competitive device to palmOne's Treo 600 smart phone in the coming weeks. Regardless of the reason, conservative traders should consider closing the play to limit potential losses. Positions in Possis Medical (NASDAQ:POSS) and Kyphon (NASDAQ:KYPH) have previously been closed to limit losses. NAKED CALLS Stock Strike Strike Break Current Gain Max Simple Symbol Month Price Even Price (Loss) Yield Yield CRDN SEP 40.00 40.50 39.10 0.50 5.29% 1.23% SWIR SEP 35.00 35.60 23.05 0.60 7.40% 1.69% AVID SEP 50.00 50.50 43.70 0.50 3.56% 0.99% USPI SEP 37.50 38.05 36.45 0.55 3.90% 1.45% BDY SEP 25.00 25.75 24.29 0.75 7.42% 2.91% DRIV SEP 30.00 30.30 25.03 0.30 4.51% 0.99% SINA SEP 30.00 30.35 21.40 0.35 5.84% 1.15% ERES SEP 22.50 22.80 20.82 0.30 6.66% 1.32% MRVL SEP 25.00 25.40 23.71 0.40 8.22% 1.57% ICUI SEP 30.00 30.65 26.54 0.65 7.56% 2.12% SWIR SEP 30.00 30.30 23.05 0.30 5.90% 0.99% UPL SEP 45.00 45.40 38.70 0.40 4.90% 0.88% MCHP SEP 30.00 30.65 26.76 0.65 6.97% 2.12% EYET SEP 45.00 45.75 37.46 0.75 10.85% 1.64% CMX SEP 30.00 30.45 28.23 0.45 4.86% 1.48% IDXC SEP 30.00 30.30 28.75 0.30 3.95% 0.99% BRCM SEP 32.50 32.90 28.31 0.40 5.76% 1.22% ELAB SEP 30.00 30.55 26.83 0.55 8.34% 1.80% MRVL SEP 25.00 25.35 23.71 0.35 5.80% 1.38% Dick's Sporting Goods (NYSE:DKS) has previously been closed to limit potential losses. Bradley Pharmaceuticals (NYSE:BDY), Ceradyne (NASDAQ:CRDN), and United Surgical (NASDAQ:USPI) are on the "watch" list. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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 Last Option Option Last Open Cost Days Simple Max Symbol Price Series Symbol Bid Int. Basis Exp. Yield Yield SHFL 33.14 SEP 30.00 SFQ-UF 0.65 1306 29.35 18 3.7% 10.2% DITC 21.52 SEP 20.00 QZD-UD 0.45 397 19.55 18 3.9% 10.1% SONO 24.13 SEP 22.50 UZS-UX 0.40 20 22.10 18 3.1% 8.0% ATI 18.81 SEP 17.50 ATI-UW 0.30 148 17.20 18 2.9% 7.8% SNDA 22.50 SEP 20.00 QKU-UD 0.30 21 19.70 18 2.6% 7.5% GMR 27.28 SEP 25.00 GMR-UE 0.35 1055 24.65 18 2.4% 6.6% AAPL 34.49 SEP 32.50 AAQ-UZ 0.45 3679 32.05 18 2.4% 6.2% Abbreviations: LB-Last Bid price, OI-Open Interest, CB-Cost Basis or break-even point, DE-Days to Expiry, SY-Simple Yield (monthly basis without margin), MY-Maximum Yield (monthly basis with margin), TS-Target Shoot. __________________________________________________________________ SHFL - Shuffle Master $33.14 *** On The Rebound! *** Shuffle Master (NASDAQ:SHFL) develops, manufactures and markets automatic card shufflers for use with card-based table games. The company also develops and markets table games and licenses these products to casinos. Shuffle Master develops and markets slot games and slot game operating systems for slot machines. SHFL - Shuffle Master $33.14 SEP 30.00 SFQ-UF LB=0.65 OI=1306 CB=29.35 DE=18 TY=3.7% MY=10.2% __________________________________________________________________ DITC - Ditech Communications $21.52 *** Solid Earnings! *** Ditech Communications (NASDAQ:DITC) is a global telecom equipment supplier for voice networks. The firm's voice-processing products focus on echo cancellers, used to eliminate echo, a common problem in existing and emerging voice networks. The company's newest voice-processing products not only provide customers with the traditional echo cancellation features, but also can be used to provide voice quality assurance features that address issues such as background noise and other voice quality issues in wireline and wireless communications. DITC - Ditech Communications $21.52 SEP 20.00 QZD-UD LB=0.45 OI=397 CB=19.55 DE=18 TY=3.9% MY=10.1% __________________________________________________________________ SONO - SonoSite $24.13 *** Testing Recent Highs! *** SonoSite (NASDAQ:SONO) is global developer of high-performance, hand-carried ultrasound imaging systems for use in a variety of clinical applications and settings. The company's products include the SonoSite TITAN system, for general imaging and cardiology applications, the SonoSite 180PLUS system, for general ultrasound imaging, and the SonoHeart ELITE, configured for cardiovascular applications. The iLook 25 imaging tool is designed to provide visual guidance for physicians and nurses while performing vascular access procedures and the iLook 15 imaging tool is designed to provide visual imaging of the chest and abdomen for physicians and nurses while performing other procedures and examinations. SONO - SonoSite $24.13 SEP 22.50 UZS-UX LB=0.40 OI=20 CB=22.10 DE=18 TY=3.1% MY=8.0% __________________________________________________________________ ATI - Allegheny Tech. $18.81 *** Basic Materials Demand! *** Allegheny Technologies (NYSE:ATI) is a diversified producer of specialty materials. The company operates in three business segments: flat-rolled products, high-performance metals and industrial products. Their products include stainless steel, nickel-based alloys and super-alloys and titanium and other specialty materials. The industrial products segment's focus is producing tungsten powder, tungsten carbide materials and carbide cutting tools. ATI - Allegheny Tech. $18.81 SEP 17.50 ATI-UW LB=0.30 OI=148 CB=17.20 DE=18 TY=2.9% MY=7.8% __________________________________________________________________ SNDA - Shanda Interactive Ent. $22.50 *** China Internet *** Shanda Interactive Entertainment (NASDAQ:SNDA) is an operator of online games in China. The games, licensed from third parties, as well as developed in-house by the company, include The Legend of Mir II and The World of Legend. The company's commercially launched games have approximately 1.4 million peak concurrent users and 931,570 average concurrent users. Shanda also provides multiplayer online games, including role-playing games and casual online games, which allow thousands of users to interact in a virtual world by assuming ongoing roles or characters with many different features. SNDA - Shanda Interactive Ent. $22.50 SEP 20.00 QKU-UD LB=0.30 OI=21 CB=19.70 DE=18 TY=2.6% MY=7.5% __________________________________________________________________ GMR - General Maritime $27.28 *** Strong Sector *** General Maritime (NYSE:GMR) provides international seaborne crude oil transportation services. The company's fleet is made up of Aframax and Suezmax tankers, which utilize ports in the Caribbean, South and Central America, the United States, Western Africa, the Mediterranean, Europe and the North Sea. Although the majority of General Maritime's tankers operate in the Atlantic basin, the company also operates its tankers in the Black Sea, the Far East and in other regions. The firm's customers include international oil companies such as ChevronTexaco Corporation, CITGO Petroleum, Shell Oil Company, BPAmoco, Exxon Mobil, ConocoPhillips and Sun International. GMR - General Maritime $27.28 SEP 25.00 GMR-UE LB=0.35 OI=1055 CB=24.65 DE=18 TY=2.4% MY=6.6% __________________________________________________________________ AAPL - Apple Computer $34.49 *** An Apple A Day... *** Apple Computer (NASDAQ:AAPL) designs, manufactures and markets personal computers (PCs) and related software, peripherals and personal computing and communicating solutions. Its products include the Macintosh line of desktop and notebook computers, the Mac OS X operating system, the iPod digital music player and a portfolio of software and peripheral products for education, creative, consumer and business customers. The company sells its products through its online stores, direct sales force, third-party wholesalers and resellers and its retail stores. AAPL - Apple Computer $34.49 SEP 32.50 AAQ-UZ LB=0.45 OI=3679 CB=32.05 DE=18 TY=2.4% MY=6.2% ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ASTE - Astec Industries $16.53 *** In A Trading Range? *** Astec Industries (NASDAQ:ASTE) designs, engineers, manufactures and markets equipment and components used in road building and related construction activities. The company's products are used in each major phase of road building, from quarrying and crushing the aggregate to testing the mix for application of the road surface. Astec also makes equipment and components unrelated to road construction, such as trenching, auger boring, directional drilling, environmental remediation and industrial heat transfer equipment. ASTE - Astec Industries $16.53 PLAY (sell naked call): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL CALL SEP 17.5 QYA-IW 84 0.45 17.95 12.5% 2.5% _________________________________________________________________ PLMO - palmOne $32.65 *** Nokia Competition = Sell-Off! *** palmOne (NASDAQ:PLMO), formerly Palm, develops, designs and sells Palm-branded, hand-held devices, accessories and the operating system Palm OS. The company was historically organized into two operating segments: the Solutions Group and PalmSource. Now the Solutions Group develops and markets hand-held devices and other accessories to provide the user with a simple, elegant and useful productivity tool. PalmSource developed and licensed the Palm OS and related software, which is referred to as the Palm platform. The Palm platform is the foundation for Palm devices, as well as for devices manufactured by other third-party licensees. PLMO - palmOne $32.65 PLAY (sell naked call): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL CALL SEP 40 UPY-IH 4387 0.25 40.25 6.2% 0.6% _________________________________________________________________ RECN - Resources Connection $32.78 *** Next Leg Down? *** Resources Connection (NASDAQ:RECN) is a worldwide professional services firm that provides accounting, risk management and internal audit, information technology, human resources and supply chain management professionals to clients on a project basis. The company assists its clients with discrete projects requiring specialized expertise in accounting and finance, such as mergers and acquisitions due diligence, financial analyses, corporate reorganizations and tax-related projects. RECN - Resources Connection $32.78 PLAY (sell naked call): Action Month & Option Open Last Cost Max. Simple Req'd Strike Symbol Int. Price Basis Yield Yield SELL CALL SEP 35 JUJ-IG 85 0.50 35.50 7.4% 1.4% ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SEE DISCLAIMER - SECTION 1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ************************Advertisement************************* Full Service Brokers Man Financial announces the formation of the OneStopOption Brokerage Group, addressing the demand for personalized, experienced service for both securities* and futures trading within the same firm. 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