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Daily Newsletter, Thursday, 10/28/2004

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The Option Investor Newsletter                Thursday 10-28-2004
Copyright 2004, All rights reserved.                       1 of 3
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Tape Painting Eases 
Futures Wrap: See Note
Index Wrap: October seasonality looks on track
Market Sentiment: Three More Trading Days


Posted online for subscribers at http://www.OptionInvestor.com
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      10-28-2004           High     Low     Volume   Adv/Dcl
DJIA    10004.54 +  2.50 10044.95  9952.48 2.04 bln 1632/1555
NASDAQ   1975.74 +  5.80  1980.36  1959.57 1.81 bln 1514/1544
S&P 100   539.48 +  1.70   541.16   535.67   Totals 3146/3099
S&P 500  1127.44 +  2.04  1130.67  1120.57 
W5000   11049.24 + 13.39 11077.04 10981.23
SOX       412.36 +  1.50   415.91   408.86
RUS 2000  585.63 -  1.55   587.19   581.72
DJ TRANS 3484.45 +  9.30  3484.45  3440.22
VIX        15.39 -  0.33    16.05    15.36
VXO (VIX-O)15.46 -  0.67    16.64    15.37
VXN        21.25 -  0.27    21.87    20.88 
Total Volume 4,217M
Total UpVol  2,385M
Total DnVol  1,774M
Total Adv  3608
Total Dcl  3532
52wk Highs  347
52wk Lows    92
TRIN       0.98
NAZTRIN    0.72
PUT/CALL   0.68
************************************************************

Tape Painting Eases
by Jim Brown

Mutual fund tape painting eased on Thursday despite a
drop in oil and a strong IPO market. Volume remained
high but at 4.2B shares it fell short of the 4.75B 
shares traded on Wednesday. That number was a multi-
month high. 

Wilshire Chart

 
Dow Chart

 
Nasdaq Chart

 

Economic news was light and failed to impress traders
but it also failed to dim any outlook. The Jobless 
Claims jumped to 350,000 once again and continue to
confuse analysts expecting them to fall as we enter
the holiday season. Estimates had been for only 338K
and inline with the low summer averages. The only 
guess from the Labor Department was lingering impact
from the hurricanes. 

In conjunction with the rising Jobless Claims the
Help Wanted Index fell back to its cycle low at 36 
and has declined in eight of nine U.S. regions over
the last three months. Only the Pacific region has
remained stable at 31 and well below the average. The
headline number reached a cycle high of 40 in February
but that was well below the pre-recession reading of
90. This is an index of newspaper advertising and the
growth in Internet job searching has depressed this
expensive medium. However the cycles still remain
valid although numbers may never return to prior highs.
This suggests hiring is still weak and the economy is
not gaining speed. 

A surprise quarter point (+0.27% to be exact) rate 
hike by China knocked oil and commodities for a loss
today on fears that China would actually slow down. 
Oil fell to close at $50.92 and well below the $55.65
all time high just yesterday. China oil imports have 
grown +61% since last year and a slowing of that demand
was seen to be a relief for oil prices. Steel and copper
prices as well as stocks dealing in those commodities 
also fell. 

This was great for the market today but I seriously
doubt it is going to last. Several analysts suggested
this was a token rate hike made as a thank you gift
to the U.S. for Colin Powell's comments yesterday.
He said Taiwan was NOT a separate country. This was
a major policy comment that lends credibility to 
China's attempt to control the Taiwan discussion.
This was the first rate hike in nine years and it
will not have any material impact. It was also seen
as an effort to move ahead of the U.S. rate hike due
Nov-10th to be seen as a leader not a follower.

China cannot afford to slow down from its current 
+9% growth rate. Every month two million rural Chinese
flee the poverty of the vast countryside and move to 
the cities in search of work and a better life. If 
China fails to provide infrastructure, housing and 
jobs for these migrants then social decay, civil 
unrest and crime will soar. The +61% increase in oil
imports over the last year is only the leading edge
of a tidal wave of oil that will be needed to continue
the growth. Upgrading just the coastal 1/3 of China to
the economic level of Korea would increase China's oil
imports from the current six million bbls per day to 
nearly 20 mil bpd. This would be another +233% increase
in imports of oil and continue huge increases in hard
commodities. 20 mil Bpd is nearly double the output of
Saudi Arabia today. Will it happen? Absolutely, only 
the timing is unknown. Over the last year their raw 
iron imports have jumped +21% and processed steel +11%.
They already consume a large portion of our building 
material output for things like plywood, sheetrock and
insulation. Should the market be worried about a quarter
point rate hike in China and the potential for their 
economy slowing? Not in my opinion!  

Oil fell below $51 and the markets did not rally. What
happened to the connection between oil and equities?
I believe that the connection has been broken for 
quite a while and the talking heads on TV have been
trying to keep it alive. A trader only needs to look
at the transports currently at a five year high with 
oil over $50 to see this disconnect. Sure we got a 
reaction bounce on Wednesday with the first break in
oil prices but the equity bounce was related more to
year end tape painting by mutual funds than the drop
in oil.

The October tape painting is a historically recognized
event. Mutual funds shuffle their portfolios over the
first three weeks of October to eliminate the losers
before their October year end. Once the losers are
dumped they pour huge amounts of money into the stocks
they are keeping over the last week of the month to 
produce the most positive picture possible for their 
year end statements. 

Historically this has produced a significant jump in
the indexes over the last week of October. It also
helps that the dumping of losers in early October
pushes those same indexes to significant support
levels that make a good launch point for the end of
month tape painting. Over the last ten years the last
week of October has shown gains ten out of ten times
even in 2001 and during the bear market. 

Ten Year Table of October Last Week Gains 

 


Today is the 75th anniversary of the Black Tuesday
market crash in 1929. Over two days the Dow lost -24%
and it took a very long time to recover that loss. I
doubt that had anything to do with today's performance
but I am sure more than one money manager did a quick
fact check to assure himself that conditions were not
building to another similar event in the near future.

At present the only major event the markets will be
watching is the election next Tuesday. The current
surveys continue to predict a dead heat and that 
should work to slow any further market advances. The
electoral count shows 191 hard for Bush and 149 for 
Kerry with 270 needed to win. 36 votes are leaning
to Bush and 58 are leaning to Kerry. 104 votes are
currently considered a toss up. Using the current 
statewide surveys to predict the results Bush would 
have 220 votes to Kerry's 207 with FL, OH and PA the
68 votes that would swing the election. The bottom 
line is the election is still too close to call and
the lack of a clear leader should keep any market 
gains over the next two days to a minimum. 

For the Dow we have seen a +300 point jump in three
days from the 9708 low on Monday. The Dow closed at
10004 today and to put it in simple terms the easy
points have already been captured. Moving over 10100
and 10200 is probably going to have to wait until after
the election. The Dow has made a very nice sprint and
it was especially nice after the three weeks of losses
but it is showing signs of being winded. Today saw a
bounce to near 10050 before consolidation began to 
appear. Market makers, fund managers or both managed
to close the Dow at just over 10000 for the second 
consecutive day and I believe it represents the level
they want to hold tomorrow and the last day of their
accounting year. 

The Nasdaq also managed to consolidate its gains and
move slightly higher to 1974 and hold over its 200dma
at 1957. The early October resistance highs were just
over 1970 and today's close eclipsed those levels. The
Nasdaq managed to close at four-month highs and even 
if it was only by a couple points traders should be
excited. You can see the Saturday papers now, "Nasdaq
at Four Month Highs as Bull Market Returns." Of course
that means they have to hold the line on Friday. 

The SOX is also at a three month high just over 410 and
it is clear that funds shifted some of their money into
chip stocks despite the general bad news from the sector.
You have to buy stocks when nobody else wants them to
be successful long term and they did exactly that in
October. The SOX is up +5% for the week. 

The Russell has also rallied off its October lows and
is nearing all time resistance at 600. Resistance at
587 has slowed the advance for the last two days but
the lack of any selling suggests a new sprint ahead.
A move over 600 should produce a stampede.  

The Wilshire-5000 closed at 11042 and barely 100 points
away from the June and October resistance high at 11164.
A breakout here along with a break over 600 on the 
Russell would be bull heaven. 

Earnings are nearly over with 377 of the S&P-500 already
reported. Current earnings have averaged +15.5% with
revenue up +11.1%. This compares to earnings of better
than 25% in each of the prior two quarters. It is also
better than some of the dire estimates of +13-14% to as
low as +10.8% over the last month. According to Thompson
Financial the final number will be in the +16.4% range
based on current company guidance from those companies
not yet reported. It also assumes no major misses. 63%
of companies have beaten the mostly lowered estimates,
20% have missed estimates and 16% have reported inline. 

The slowing of the earnings flow and the current hard
estimates leaves little to excite the market from the
earnings standpoint. Now that we are at month end the
economics will increase sharply and Friday is the first
major reporting schedule in this cycle. We will see the
GDP, Employment Cost Index, NAPM, PMI and Consumer 
Sentiment. You can bet the numbers will immediately be
turned into campaign fodder and hurled vehemently from
side to side. This does have the potential to upset
the current market consolidation we saw today. I would
look for traders to be cautious but funds have a vested
interest in maintaining Dow 10,000 so selling could be
contained. I would be careful going long ahead of next
Wednesday because Monday could turn into a day of
window undressing after the fund year end and ahead 
of the election. A legal battle over the election 
results could also poison market sentiment. Patience
is the key here. We have endured many months of being
bombarded with campaign mudslinging and the finish line
is just ahead. These last three trading days should pass
quickly. 

Enter Passively, Exit Aggressively. 

Jim Brown
Editor


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

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


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

October seasonality looks on track

The month of October is now 20-days old and for the most part, 
history seems to be repeating itself.

As noted in the September 23 Index Trader Wrap "Some seasonally 
bullish trends for sectors approaches," we noted that airlines, 
internet, cyclical, high-tech, telecomm, NASDAQ-100, banking, 
forest/paper, gold/silver, semiconductor and broker/dealers 
tended to kick off some pretty impressive historical winning 
streaks.  

With my QCharts' 20-day percentage change turned on, here's how 
the first 20-days of trading have unfolded.

U.S. Market Watch - 10/28/04 Close

 

Ten out of the twelve sectors tracked in our U.S. Market Watch 
have performed rather well, and there's one trading day left!  
Airlines have surged 18%, thanks largely in part to Delta's 
(NYSE:DAL) $5.72 +15.78 % recent jettison from below $3.00.

Only the Amex Gold Bugs ($HUI.X) 228.69 -1.49%, where today's 
decline just barely erases a month-to-date gain, and the Morgan 
Stanley Cyclical Index (CYX.X) 686.38 -0.26% currently show a 
decline for the month.  

On an historical basis, the gains in the XAL.X might be a little 
overdone, where according to the Stock Trader's Almanac, history 
has the group gaining 16.6% from October-December.

Value players might stick with the cyclicals, where their 
historical run, which should have started this month, carries 
through to April and a more methodical 12.8% gain has been found.

The broker/dealers, which have really come to life the past 
couple of days with a bold break above their longer-term 200-day 
SMA, their seasonal bullish move has tended to run through 
January with an 18.2% gain.

My profiled trades in the Semiconductor HOLDRs (AMEX:SMH).... 
please, please, please sit here until November expiration!  The 
Semiconductor Index (SOX.X) has shown a historical tendency to 
gain 31.7% from October to April.

Good Gravy!  Overstock.com (NASDAQ:OSTK) $56.02 -2.39% and Google 
(NASDAQ:GOOG) $193.30 +3.94%.  What gray hair I had on September 
23 has all fallen out.

As I get ready to turn the page on my Stock Trader's Almanac 
calendar, there's a silly note that NASDAQ Composite (COMPX) 
1,975.74 +0.29% and the small-caps of the Russell 2000 Index 
(RUT.X) 585.63 -0.26% are bullish "sector" seasonality plays.  
Bar chartists should be looking for bullish MACD crossovers (MACD 
moving above SIGNAL).

According to the STA, the NASDAQ Composite (COMPX) has shown a 
historical tendency to gain 10% from November-January, and a 
14.9% gain from November-June.  The Russell-2000 historically 
gains 12.9% from November to May.

Please note:  The statistics I note above did not include the 
recent October seasonal trade due to publishing deadlines.

Ahhhhhh.... history shmishtory....

Russell 2000 Index (RUT.X) - Daily Intervals

 

Hold on a minute!  There's a bullish MACD crossover in the daily 
interval chart, and that's a rather strong one in my opinion as 
it comes when MACD is trending back near the zero level.  

I left the conventional use of retracement on the RUT.X chart 
(April's 4-year high to recent August low).  But for grins, I'm 
taking a PINK retracement, anchoring it at the September 30 
close, and then dragging the 100% higher to what would equate to 
a 12.9% gain.  Then coloring some "zones of resistance" in 
YELLOW.

You gott'a believe the RUT.X is bullish above the recent relative 
high.  If you're a stochastics trader, and think things are a 
little "overbought," then maybe some Election Day jitters gives 
you the pullback entry closer to 570.

Hmmm... I'm not a believer.  Are you?  Let's put these thoughts 
to rest.  Here's a weekly interval chart.  I'll show you.

Russell 2000 Index (RUT.X) - Weekly Interval Chart

 

Hold on a minute!  I was just sure we'd see a BEARISH MACD on the 
weekly interval chart.  Hmmmm.... do you wish you'd a bought some 
Russell in April of 2003 when the 10-week (50-day SMA) crossed 
above the 40-week (200-day SMA) as the RUT.X broke above some 
horizontal resistance at 420?  Oooooeeeee!  Despite that 
incredible run, it looks like the RUT.X tacked on roughly 13% 
from the first weekly bar in November (open 528.22) to an "early" 
top high near 600 in April.

Gosh... the RUT.X looks positions to at least give a run at 
history.  Doesn't it?

Are market participants trying to pull the wool over a bear's 
eyes?  This pickup in volume in October isn't all that unusual, 
but maybe bulls are returning in force to play the seasonal 
bullish trends.

Market Snapshot / Internals - 10/28/04 Close

 

Early this morning (10:00 AM EDT), the NYSE 10-day NH/NL ratio 
was reading EXACTLY 70.0%, and that would have been good enough 
to get the 10-day ratio reversing back higher on its point and 
figure chart (2% box size, 3-box reversal to 70% needed), but we 
didn't quite get their by the close, which is what we chart.  
Maybe tomorrow.  If so, then both shorter-term and intermediate-
term signs of bullish leadership resume.  NASDAQ still needs a 
62% 10-day NH/NL ratio to reverse up.

Talk about flat equity trade, look at TRIN.  I get the feel that 
traders were sitting either side (bid/offer) for the bulk of the 
session, 

I posted both of these charts, which I make by hand, in today's 
Market Monitor at 12:11:20.  Did you know that after our IT 
personnel archive the Market Monitor, you can view it by looking 
under the "Monitor Archive," then clicking on a date?

Oh!  At the very bottom of today's archive, are some things I saw 
last night regarding a "bullish theme among the brokers," when I 
was updating the various bullish % changes.

Today's trade just has the look that nobody wanted to do much.  

The dip at the open seemed to find bullish buying as oil was 
weak.  But when I look at the 10-year yield ($TNX.X) on a top-of-
the-hour reading, that bugger was up 2.4 basis points at 10:00 
AM, then it was down 2.9 basis points at 01:00 PM, then it was 
relatively unchanged by the close.  That's a pretty good intra-
day swing of 5.3 basis points, where 4.08% finds equilibrium by 
the close.

Today, I found myself agreeing with one of CNBC's guests.  I 
can't remember his name, but what he said, I found myself 
agreeing with.

If President Bush wins next Tuesday's election, and there isn't a 
recount, then the markets are set to roll higher.  To me, the 
market sure feels like it is set up to do so.

Now, we talked awhile back about how a stock market tends to like 
the current sitting President to win, and even more so when it is 
a Republican.  Now I don't want to get into the Republican / 
Democrat debate, but it all comes back to some type of 
"certainty."  Everyone knows what we've got, and what President 
Bush's policies and actions have been.  Nobody's quite as certain 
about Senator Kerry.

If John Kerry were President today, and was running for re-
election against George W. Bush, I'd say just the opposite.  The 
MARKET would have more certainty if John Kerry were to win.  
That's it, that's all I have to say on this subject. 

Oh... look for a strong voter turnout, and don't wait until the 
last minute to vote!  My mother and father went to vote early, 
and they stood in line for an hour here in Colorado.  They talked 
to a lady that was standing next to them and she said she drove 
by the early voting location in the morning and the line was out 
the door.  She thought she would come back later in afternoon 
when the line was shorter.  When she returned, the line extending 
around the corner of the building.

Oh... another thing!  Don't forget that this weekend is the end 
of daylight savings time!  If you're in a region that observes 
daylight savings time, the you'll turn your clock back an hour on 
Saturday.  

Laughing... I can almost guarantee you I will have an email in my 
e-mail box Monday morning where an early bird trader will be 
wondering where everyone is and why the markets aren't trading.

Now, let's look at the Pivot Matrix for tomorrow.  Here's what 
I'm doing in my mind.

Tomorrow we're going to get the advanced third quarter GDP, where 
economists are forecasting the economy to have grown at an annual 
rate of 4.3%.

Did you read the 10/17/04 Ask the Analyst column "An economic 
update?"  At that time, I didn't have economists' current 
consensus, and I (Jeff Bailey) eyeballed a 3.4% annual growth 
rate.  One of the "factors" that went into that was the HIGHER 
oil price.

Think about that higher oil price when the GDP data is released.

Maybe there are others that have been thinking about 3.4% growth 
in the recently completed Q3, and undershot a bit.  

Now.... what do YOU think Treasury yields will do if the GDP 
falls BELOW my 3.4% eyeball approach, or ABOVE economists' 4.3% 
rate?

Pivot Matrix - 

 

In the DAILY Pivots, we can see that the equity-based indices 
closed very close to tomorrow's DAILY Pivots, where S1-R1 mark 
today's highs/lows.  Hmmmm... similar to what I noted in today's 
10-year yield.  Up 2.4 bp, then down 2.9 bp, to finish relatively 
unchanged.

Tomorrow, I'd have a pretty darned close eye on the benchmark 
bond's yield.  Yes, lets monitor oil prices too, but I think it 
will take a move BELOW 4.07% (DAILY S2) or ABOVE DAILY R1-MONTHLY 
PIVOT, to really get a stock market reaction.

What would the MARKET do if despite higher energy prices, the 
economy grew at.... say 5%?  I think the market would sell the 
10-year rather sharply, causing its yield to rise, MAYBE to at 
least 4.157% and DAILY R2 and a minimum.

Think about this in the context of how YIELD and EQUITIES have 
tended to follow each other in recent weeks.

Now we're seeing some sign of weakness in oil.

Unless we've had our head in the sand, we know that oil has risen 
substantially since the end of June.  From $37.05 to be rather 
exact.

I will admit that I probably "low balled" my 3.4% forecast, but I 
tend to lowball things.  At least I try to.

The S&P Banks Index (BIX.X) has two pretty good correlations for 
firm support.  Weekly R1/DAILY S1, the WEEKLY Pivot and DAILY S2.  
I'd think "not overly happy" with GDP if BIX.X go much below 
DAILY S1, and "rather unhappy" below DAILY S2.

Why?  Because of my thoughts in the October 21 Index Trader Wrap 
titled... "Bulls may be BANKING on tech rally."

Look at the MONTHLY Pivot matrix with one day left in the month.  
Doesn't the blue levels traded look a bit like a bird, or a jet 
plane?  What is the NDX/QQQ doing up at MONTHLY R2?  

A season bullish bias?  It's sure looking that way.

Silicon Valley Bancshares (NASDAQ:SIVB) $40.31 +0.22%.

Jeff Bailey


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

Three More Trading Days
- J. Brown

Hang on folks we're almost to the finish line.  I am talking 
about the Nov. 2nd election.  With the election this close 
investors could be dipping their toe in the water and placing 
some early bets to beat the crowd on any post-election rally.  Of 
course there is a strong chance that the election numbers will be 
so close the final result will be tied up in recounts and 
lawsuits.  This is a potential negative for the markets that 
would like to see this whole election-circus end.  Remember, the 
stock market hates uncertainty and the margin between Bush and 
Kerry seems to be slimming. 

I think the markets did pretty well holding on to their gains 
from the previous two sessions.  There was definitely some profit 
taking in oil and energy stocks but crude oil fell for its third 
session in a row closing under $51 a barrel for the first time in 
three weeks. 

A lot of the chatter today was on commodity related stocks due to 
a surprise rate hike from China.  The Chinese has been trying to 
slow down their economy before it overheats.  This was the first 
rate hike in nine years.  There was an immediate concern that if 
China slows down too much it will drag on the U.S. and the rest 
of the global economy.  

Speaking of economics Friday will bring a raft of economic 
reports.  First and foremost will be the Q3 GDP numbers.  
Economists are currently looking for +4.0 to +4.3 percent growth 
rate compared to a +3.3 percent rate last quarter.  As we near 
the holiday shopping season Wall Street will also be watching the 
University of Michigan Consumer sentiment numbers.  The current 
estimate is for a reading of 88 compared to the last reading at 
87.5.  We'll also get the Employment Cost Index (ECI), the NAPM 
number, and the Purchasing Managers Index (PMI). 

Tomorrow could be a toss up.  I know.  I'm really sticking my 
neck out here but it wouldn't surprise me to see the market go 
either way.  Friday is the last day for many mutual funds' year-
end window dressing.  That probably means that the current 
"winners" could see another last push higher.  Plus, as I 
suggested earlier there could be investors out there buying now 
to get in front of any post-election rally.  Yet on the other 
hand there is so much confusion, uncertainty and indecision on 
who might win the election we could trade sideways for the next 
three days.  If I had a third hand I'd suggest that we might see 
more defensive moves and profit taking.  There is still a 
possibility of a terrorist event near or on election day. Plus, 
the cloud of not having a clear winner is a big negative. 

Overall I think investors would like to be bullish and with the 
election coming to an end soon and oil prices dropping.  Normally 
news that another airline had filed for bankruptcy would be a big 
story but the media seems to have already forgotten.  Of course 
that's easy to do with the election next Tuesday.  Yet another 
sentiment indicator that investors are turning bullish again has 
been the recent attraction and excitement over the IPO market 
again.  



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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  9497
Current     : 10004

Moving Averages:
(Simple)

 10-dma:  9894
 50-dma: 10109 
200-dma: 10260



S&P 500 ($SPX)

52-week High: 1163
52-week Low : 1018
Current     : 1127

Moving Averages:
(Simple)

 10-dma: 1109
 50-dma: 1114
200-dma: 1119



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1301
Current     : 1487

Moving Averages:
(Simple)

 10-dma: 1453
 50-dma: 1417
200-dma: 1438



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

CBOE Market Volatility Index (VIX) = 15.39 -0.33
CBOE Mkt Volatility old VIX  (VXO) = 15.48 -0.67
Nasdaq Volatility Index (VXN)      = 21.25 -0.27 


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.68        827,548       560,128
Equity Only    0.55        654,090       359,641
OEX            0.55         32,153        17,726
QQQ            1.40         30,292        42,577


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

Bullish Percent Data

           Current   Change   Status
NYSE          63.7    + 0.8   Bear Correction
NASDAQ-100    51.0    + 2     Bull Alert      
Dow Indust.   50.0    - 0     Bear Confirmed
S&P 500       61.4    + 1.2   Bear Correction
S&P 100       60.0    + 1     Bear Correction


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

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


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

 5-dma: 0.96
10-dma: 0.94
21-dma: 1.00
55-dma: 1.05


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    1408      1456
Decliners    1379      1523

New Highs     195       152
New Lows       22        31

Up Volume   1126M     1052M
Down Vol.    929M      733M

Total Vol.  2073M     1810M
M = millions


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

Commitments Of Traders Report: 10/19/04

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

Commercial traders continue to hedge their bets in the big
S&P contacts and are nearing a dead heat between longs and
shorts.  Small traders remain mostly net bullish but have
pared back their enthusiasm a bit.

Commercials   Long      Short      Net     % Of OI
09/28/04      404,773   434,441   (29,668)   (3.5%)
10/05/04      421,217   435,736   (14,519)   (1.7%)
10/12/04      423,472   436,780   (13,308)   (1.5%)
10/19/04      432,945   441,041   ( 8,096)   (0.1%)

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
09/28/04      135,317   107,173    28,144    11.6%
10/05/04      137,210   114,489    22,721     9.0%
10/12/04      139,175   113,903    25,272     9.9%
10/19/04      147,148   124,827    22,321     8.2%

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

We see a similar picture in the e-minis.  Commercial traders
aren't making any changes.  They remain net bearish and we
have the same reading as last week.  Meanwhile small traders
have slowly grown more net bullish, which of course is a
bearish contrarian indicator.

Commercials   Long      Short      Net     % Of OI 
09/28/04      226,020   420,714   (194,694)  (30.1%)
10/05/04      248,190   476,608   (228,418)  (31.5%)
10/12/04      258,457   517,805   (259,348)  (33.4%)
10/19/04      264,860   531,541   (266,681)  (33.4%)

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
09/28/04      262,501     68,255   194,246    58.7%
10/05/04      308,021     80,373   227,648    58.6%
10/12/04      309,720     62,502   247,218    66.4%
10/19/04      353,903     66,027   287,876    68.5%

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


NASDAQ-100

Commercial trades have not moved much.  They remain net 
bullish on the NASDAQ 100.  Small traders upped both their
longs and shorts and reduced their bearish posture a tad but
remain strongly net bearish.

Commercials   Long      Short      Net     % of OI 
09/28/04       55,045     32,319    22,726   26.0%
10/05/04       55,640     32,872    22,768   25.7%
10/12/04       52,572     32,775    19,797   23.2%
10/19/04       52,630     31,940    20,690   24.4%

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
09/28/04       10,078    22,917   (12,839)  (38.9%)
10/05/04       12,254    30,693   (18,439)  (42.9%)
10/12/04        8,756    24,400   (15,644)  (47.2%)
10/19/04       10,462    25,243   (14,781)  (41.3%)

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 seem content to sit on the sidelines with
out any big directional bets on the Industrials.  Longs and
shorts have remain pretty close to one another for a few weeks
now.  That's not so with the small traders.  The latest data
shows a big drop in short positions and the bias has turned
bullish for the first time in weeks.


Commercials   Long      Short      Net     % of OI
09/28/04       29,714    26,877    2,837       5.0%
10/05/04       27,498    25,772    1,726       3.2%
10/12/04       24,150    22,849    1,301       2.7%
10/19/04       25,385    24,213    1,172       2.3%
 
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
09/28/04        5,143     5,988   (  845)   ( 7.6%)
10/05/04        5,531     5,539   (    8)   ( 0.0%)
10/12/04        8,814     9,167   (  353)   ( 1.9%)
10/19/04        8,327     6,015    2,312     16.1% 

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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The Option Investor Newsletter                 Thursday 10-28-2004
Copyright 2004, All rights reserved.                        2 of 3
Redistribution in any form strictly prohibited.


In Section Two:

Dropped Calls: None
Dropped Puts: None
Call Play Updates: DHR, FDX, GS, IBM, ITW, LEH, SBUX
New Calls Plays: None
Put Play Updates: APOL
New Put Plays: None


****************
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:
*****

None


PUTS:
*****

None


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

********************
PLAY UPDATES - CALLS
********************

Danaher - DHR - close: 54.74 change: -0.25 stop: 51.99

DHR is one of the new calls we added to the play list Wednesday 
night.  So far DHR is still consolidating under the $55 level.  
With the major indices churning sideways today it's not a 
surprise to see DHR rest as well.  We reiterate our suggestions 
that aggressive traders can use a dip to $53-54 as an entry 
point.  More conservative traders can wait for a breakout over 
$55.00 (probably a trade over $55.15 would work).  

Picked on October 27 at $54.99
Change since picked:    - 0.25
Earnings Date         10/21/04 (confirmed)
Average Daily Volume =     1.3 million 
Chart =


---

Fedex Corp - FDX - close: 90.55 change: +0.76 stop: 84.99

After an early morning dip the transports turned things around as 
crude oil slipped for the third day in a row.  This helped FDX 
rally about 0.84 percent but more importantly FDX managed to 
breakout over round-number resistance at the $90.00 mark.  This 
is great news.  Stocks that breakout over $90 tend to hit $100 in 
a relatively quick time.  

Picked on October 21 at $89.45 
Change since picked:    + 1.10
Earnings Date         09/22/04 (confirmed)
Average Daily Volume =     1.5 million 
Chart =


---

Goldman Sachs - GS - close: 97.43 change: +1.33 stop: 91.00

GS is another one of newly added calls.  The broker-dealer sector 
has been relatively strong lately and the XBD index broke out 
over resistance at the 130 level and the simple 200-dma.  Shares 
of GS followed suit with a breakout over $96 and its simple 200-
dma.  Today's (Thursday) 1.38 percent gain is a nice follow 
through to yesterday's move.  The MACD has strengthened its new 
buy signal.  If shares dip look for a bounce from the $96 level. 

Picked on October 27 at $96.10
Change since picked:    + 1.33
Earnings Date         09/21/04 (confirmed)
Average Daily Volume =     3.2 million 
Chart =


---

Intl Business Mach. - IBM - close: 89.50 chg: -0.50 stop: 86.00

In the news IBM's Chairman Sam Palmisano was noted for being on 
his second trip to India in the past year.  Evidently he was 
discussing IBM's plans for expansion with the Indian technology 
minister.  IBM already has 9,000 employees in India (source: AP).  
Here at home on the NYSE shares of IBM slipped lower by 50 cents 
to close back under the $90 mark and rest about 19 cents under 
its simple 200-dma.  Aggressive traders can watch and wait for a 
bounce from the $88.00 level.  More conservative traders may want 
to wait and look for a more confident breakout over $90.00.  A 
move over $90.25 may suffice.

Picked on October 27 at $90.00
Change since picked:    - 0.50
Earnings Date         10/18/04 (confirmed)
Average Daily Volume =     4.7 million 
Chart =


---

Illinois Tool Works - ITW - close: 91.09 chg: +0.20 stop: 87.50

ITW is another new play we added to the call list on Wednesday 
night.  The stock continues to bounce higher from the bottom of 
its current trading range.  We're encouraged to see the technical 
oscillators and MACD indicator strengthen.  The $92 level, 
bolstered by a cloud of minor moving averages is the next hurdle 
for ITW.  

Picked on October 27 at $90.89
Change since picked:    + 0.20
Earnings Date         10/19/04 (confirmed)
Average Daily Volume =     1.2 million 
Chart =


---

Lehman Brothers - LEH - close: 82.35 chg: +0.65 stop: 77.25

The rally in LEH continues just as the rally in the XBD soars 
ahead.  We are very encouraged by the strength of the breakout in 
the XBD broker-dealer index.  Plus we're encouraged by the gains 
in LEH and the breakout over the $82 level.  However, traders 
should note that nothing goes up in a straight line.  LEH is now 
up about five of the last six days.  It may be time for a dip.  
If shares dip then bulls can buy a bounce from anywhere above the 
$80 mark.  Technicals continue to look strong and the MACD has 
finally produced a new buy signal.

Picked on October 26 at $80.60 
Change since picked:    + 1.75
Earnings Date         09/21/04 (confirmed)
Average Daily Volume =     2.0 million 
Chart =


---

Starbucks - SBUX - close: 52.85 chg: +1.06 stop: 47.95 *new*

Up, up and away!  So goes Superman, err.. I mean Starbucks.  The 
momentum is picking up steam here.  One could say shares of SBUX 
are as hot as their coffee drinks.  We are still suggesting a 
profit target in the $54-55 range.  At this rate SBUX will be 
there quickly.  We probably would not suggest new bullish 
positions unless SBUX dipped back toward the $51 area and 
bounced.  Readers should note that our main risk here is a broker 
downgrade.  At $53 SBUX is above the median price target of $50.  
Any day now we could hear a "valuation" call on SBUX.  Now 
whether or not shares respond or if they produce a one-dip is the 
real question.  We are going to raise our stop loss to $47.95.

Picked on October 17 at $49.47 
Change since picked:    + 3.38
Earnings Date         11/10/04 (confirmed)
Average Daily Volume =     3.3 million 
Chart =


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

None


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*******************
PLAY UPDATES - PUTS
*******************

Apollo Group - APOL - close: 67.17 chg: -1.12 stop: 72.01     

The good news here is that APOL did not participate in the 
market's two-day rally.   Sure it bounced a little bit yesterday 
but the stock quickly sold off this morning.  The new trading 
range to watch is $68.50 to $66.50.  We do need to consider the 
possibility that APOL will try and fill the new gap down but 
right now we're looking to the $70 level to act as psychological 
resistance.

Picked on October 10 at $69.81
Change since picked:    - 3.06
Earnings Date         10/05/04 (confirmed)
Average Daily Volume =     3.3 million 
Chart =



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

None


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**********

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The Option Investor Newsletter                 Thursday 10-28-2004
Copyright 2004, All rights reserved.                        3 of 3
Redistribution in any form strictly prohibited.


In Section Three:

Watch List: Internets to Oil Services and more 
Combos/Straddles: Size Matters -- In More Than One Respect  

**********
WATCH LIST
**********

Internets to Oil Services 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.
___________________________________________________________________


Google Inc - GOOG - close: 193.30 change: +7.33

WHAT TO WATCH: Unbelievable!  It's a one-stock Internet mania.  
GOOG has continued to soar after its earnings report.  Shares 
have almost doubled from its first day of trading.  Eventually 
this stock will cool; especially as the lock up periods start to 
unwind.  However, at this time we're going to watch GOOG for a 
stock split announcement.  It's pure speculation on our part but 
$200 a share sounds like a good spot to split. 

Chart=


---

Schlumberger - SLB - close: 62.05 change: -0.99

WHAT TO WATCH: This is a pivotal spot for SLB.  The oil sector 
has had a rough week.  Not only are investors hitting the "sell" 
button as a number of oil companies report earnings this week but 
crude oil has taken a downturn.  The recent drop in SLB has been 
fueled by heavy volume and shares have broken their simple 200-
dma.  However, they are currently testing a long-term uptrend of 
support dating back to April 2003.  A drop under the $60 mark 
would break this support and we'd consider it an entry point for 
bearish positions. 

Chart=


---

ITT Industries - ITT - close: 80.41 change: +0.76

WHAT TO WATCH: Technicals on ITT are hinting at a new up turn.  
The stock has actually been trading in a narrowing range for the 
last several weeks.  If ITT can breakout over the $81.00-81.50 
region then traders might want to consider bullish positions. A 
move over $82.00 would produce a new triple-top breakout buy 
signal on its P&F chart.  Currently the P&F chart is already 
bullish with a $92 target.

Chart=


---

Yahoo! Inc. - YHOO - close: 36.45 change: +0.27

WHAT TO WATCH: GOOG has now pasted YHOO in market cap but that 
hasn't stopped tech traders from pushing YHOO back toward four-
year highs.  Technicals are positive and its MACD just produced a 
new buy signal.  A breakout over $36.50 could be an entry point 
for a run toward the $40 level. 

Chart=



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

MDC $77.57 +1.09 - MDC was on the watch list last night as a 
bullish candidate with its bullish triangle breakout on the P&F chart.

MTB $102.50 +1.43 - There it goes!  MTB has reversed from its 
mid-October dip and is now hitting new all-time highs.

BOW $36.87 +1.97 - Candlestick traders will recognize Thursday's 
candle as a bullish engulfing candlestick, which is typically a 
bullish one-day reversal.



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****************
Combos/Straddles
****************

Size Matters -- In More Than One Respect

By Mike Parnos

Life is full of surprises -- some good, some not so good.  But, we 
don't like surprised.  We like to know.  This surprise falls into 
the category of "if you don't ask the right questions at the 
beginning, you may know the answer until it's too late."

Mark, one of my students, called me recently, quite upset.  In his 
Fidelity brokerage he just discovered that the money that was being 
held as maintenance on his Iron Condor positions (they require both 
sides), was not earning money market interest.  Based on his 
account size, his typical size trade, and respective requirements, 
he was losing about $1,500 a year.  That ain't peanuts, folks!!  

Gee, what could you do with an extra $1,500?  A family trip to a 
Caribbean island?  A new large screen TV?  1,500 double 
cheeseburgers?  The possibilities are endless.  Bottom line -- the 
size of your brokerage account matters.  That $1,500 simply looks 
better in your pocket.

Needless to say (but you know I'll say it anyways), it pays to ask 
the most obvious questions.  And, remember, when you do ask 
questions, make sure you get the name of the representative you 
talk to and the date and time of the call.  Believe me, it will 
come in handy. 

He explained the situation to Fidelity and they dismissed his 
point, saying that they would have to change their entire 
(antiquated) software system to change the policy.  Fidelity 
concluded that they preferred to risk losing Mark's account (and 
likely others) rather than spending what is necessary to keep up 
with the competition -- and there's plenty of competition for 
trading dollars.  Hmmm . . . makes you wonder, doesn't it?

Mark had the Fidelity account for many years.  Notice I used the 
word "had" -- past tense.  He's in the process of transferring his 
account, in its entirety, to another brokerage firm -- one that 
operates in the 21st century.   Mark has a terrific family.  As an 
accomplished trader, he does quite well using our non-directional 
CPTI strategies.  But, he's now figuring out what he can do with 
the extra $1,500.  It's icing on the cake -- and icing is sweet, in 
more than one sense.

Perhaps this column will motivate CPTI students to pick up the 
phone and ask at least that one simple question.  Maybe brokerages 
like Fidelity will take notice (but don't hold your breath).  Don't 
take for granted anything about your brokerage.  Always ask!  You 
can avoid surprises and, with the information you get, you can make 
better decisions.
____________________________________________________________

CPTI Takes Responsibility
OK, the word is out.  Couch potatoes don't exercise a lot.  They 
enjoy Fritos, pizza and a variety of Ben & Jerry products.  
However, it's by choice.  What happens when you don't exercise and 
eat food that actually tastes good?  You may put on a few pounds.

A recent AP article reported that in 1962 (pre-CPTI) the average 
man weighed about 166 pounds.   The latest study shows that today 
(post-CPTI) the average man weighs 191 pounds.  That's an increase 
of 25 pounds.  As a man with more than his share of adipose tissue, 
I believe that there is just more of us, physically and 
economically, to love.  

By the way, there are plenty of women CPTI traders.  They, on the 
average, have not gone unnoticed.  As a matter of fact, there's 
about 24 more pounds of them to notice -- from 140 lbs. in 1960 to 
164 today.  It sounds like a match made in heaven -- or at Dunkin' 
Donuts (same place).  God wouldn't have created éclairs if he 
didn't want us to eat them.

Just to let you know, men and women are also a little taller.  Men 
stretched 1.5 inches (to an average height of 5'9") and women grew 
an inch (to 5'4").  Unfortunately, the increase of 1.5 inches for 
the guys wasn't where it would do them any good.
____________________________________________________________

A Great Weekend Ahead
I'm looking forward to this weekend.  I'm going to meet with a 
bunch of friends and we're going to talk about trading all weekend.  
Maybe I'll learn something.  When great minds get together, there 
are often amazing results.  
____________________________________________________________

Positions Looking Good
The market is damn fickle -- two or three big down days followed by 
two or three big up days.  But, that's what we like -- bouncing 
around and going nowhere.  With about three weeks left, our 
positions are resting comfortably within their ranges.

Don't go out and spend the money quite yet.  A lot can happen – 
especially with next week's election.  Whether you vote for Barney 
Fife or Gomer Pyle, it's important that you get out there and vote.  
Just make sure you understand what's going on.   It's similar to 
option trading.  Do your research, use some common sense and gather 
whatever information you need to make an informed decision.  When 
you deal with facts and take emotion out of the equation, you'll 
find you can make a difference.
____________________________________________________________

Think Positive 
-- Living on Earth is expensive, but it does include a free trip 
around the sun every year. 
-- How long a minute is depends on what side of the bathroom door 
you're on. 
-- Birthdays are good for you; the more you have, the longer you 
live. 
-- Happiness comes through doors you didn't even know you left 
open.
-- We could learn a lot from crayons: some are sharp, some are 
pretty, some are dull, some have weird names, and all are different 
colors....but they all exist very nicely in the same box.  
_________________________________________________________________

NOVEMBER CPTI POSITIONS
November Position #1 - SPX Iron Condor - 1127.44
We sold 12 SPX November 1185 calls and bought 12 SPX November 1200 
calls with a credit of about $1.25 ($1,500).  Then we sold 9 SPX 
November 1070 puts and bought 9 SPX November 1050 puts for a credit 
of about $1.65 ($1,485).  Total credit and potential profit of 
about $2,985.  The maximum profit range is from 1070 to 1185.  Can 
this 115-point range withstand the market's emotional highs and 
lows?  Let's hope so.  The maintenance is $18,000.  The potential 
return on risk is about 20%.

New November Position #2 - SPX Iron Condor - 1127.44
Considering the downward market movement, I felt it is appropriate 
to initiate a SPX position with different parameters.  We sold 10 
SPX Nov. 1160 calls and bought 10 SPX Nov. 1180 calls for a credit 
of about $1.40 ($1,400).  Then we sold 13 SPX Nov. 1025 puts and 
bought 13 SPX Nov. 1005 puts for a credit of about $1.20 ($1,560). 
Maximum profit potential of about $2,960.  Max profit range of 1025 
- 1160.  Maintenance: $20,000.

November Position #3 - OEX Iron Condor - 539.48
We sold 10 OEX Nov. 500 puts and bought 10 OEX Nov. 490 puts for a 
credit of about $.70 ($700).  Then we sold 10 OEX Nov. 555 calls 
and bought 10 OEX Nov. 565 calls for a credit of about $.60 ($600).  
Total net credit and maximum profit of $1.30 ($1,300).  Max profit 
trading range of 500 to 555.  Maintenance $10,000.

November Position #4 - RUT - Iron Condor - 585.63
We sold 10 RUT Nov. 520 puts and bought 10 RUT Nov. 510 puts for a 
credit of about $.70 ($700).  Then we sold 10 RUT Nov. 610 calls 
and bought 10 RUT Nov. 620 calls for a credit of about $.60 ($600).  
Total net credit and maximum profit of $1.30 ($1,300).  Max profit 
range of 520 to 610.  Maintenance $10,000.
____________________________________________________________

ONGOING POSITIONS
QQQ ITM Strangle – Ongoing Long Term -- $36.96
We bought 10 contracts of the 2005 QQQ $39 puts and 10 contracts of 
the 2005 QQQ $29 calls for a total debit of $14,300.   We make 
money by selling near term puts and calls every month.  Here’s what 
we’ve done so far:  Oct. $33 puts and Oct. $34 calls – credit of 
$1,900. Nov. $34 puts and calls – credit of $1,150. Dec. $34 puts 
and calls – credit of $1,500.  Jan. $34 puts and calls – credit of 
$850.  Feb. $34 calls and $36 puts – credit of $750. Mar. $34 calls 
and $37 puts – credit of $1,150. Apr. $34 calls and $37 puts – 
credit of $750.  May $34 calls and $37 puts – credit of $800. June 
$34 calls and $37 puts -- total net credit of $750.  We rolled out 
to the July $34 calls ($.20 credit) and $37 puts ($.60 credit) and 
took in a credit of $.80 ($800).  We rolled to the August $34 calls 
and $37 puts, taking in a credit of $900.  We rolled to the Sept. 
$34 calls and $37 puts, yielding $.45 or $450 for the cycle. For 
October we were again limited to a $.45 ($450) rollout.  We rolled 
to the November. $34 calls and $37 puts for a total of $.70 ($700). 
Our new total credit is now $12,900. 

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

ZERO-PLUS Strategy.  OEX – 539.48
In my Feb. 8th column, I outlined a strategy based on an initial 
investment of $100,000.  $74,000 was spent on zero coupon bonds 
maturing in seven years at a value of $100,000.  The principal 
$100,000 investment is guaranteed.  We’re trading the remaining 
$26,000 to generate a "risk free" return on the original 
investment.  We own 3 OEX December 2006 540 calls @ $81 (x 300 = 
$24,300).  Our cash position as of August expiration was $8,390.  
In September we added another $975 for a total of $9,365.  In 
October we added $650 for a new total of $10,015.

Zero-Plus Position For November
November bull put spread 500/490 for credit of $.70 x 5 = $350.  
November bear call spread 555/565 for credit of $.60 x 5 = $300.  
If all goes well, we'll be able to add another $650 to our cash 
position.
__________________________________________________________

SPX "Sure Thing" Strategy - 1095.74
Formerly called the "Credit Spread Boogie."  The market seems to be 
in an uptrend since mid-August.  Let's go with the flow until the 
market tells us otherwise.  We sold 3 SPX 1120 October puts and 
bought 3 SPX 1095 October puts for a net credit of about $6.50 
($1,950).  The initial maintenance was $7,500.

When the SPX traded in the low 1100s, it was time for an 
adjustment.  We closed out the original bull put spread for $13.20 
($3,960).  We then opened a seven-contract position of an 1115/1140 
bear call spread, taking in $6.35 ($4,445).  That means we've taken 
in some extra premium.  Our new profit potential is $2,435 -- if 
SPX closes below 1115.  

We've been getting whipsawed.  Our most recent position was a 
November 14-contract 1120/1095 bull put spread (coincidentally, 
right back where we started) at $7.00 ($9,800).  The maintenance is 
getting pricey at $35,000.  That's why this strategy is not for 
everyone.  Our potential profit is still $2,435. 

Here we go again.  We had to close the 1120/1095 bull put spread 
and we initiated a new 1115/1140 bear call spread.  We picked up 
another $350 in premium to $2,785, but our maintenance is now 
$70,000. 
____________________________________________________________

Happy Trading! 
Remember the CPTI credo: May our remote batteries and self-
discipline last forever, but mierde happens. Be prepared! In 
trading, as in life, it's not the cards we're dealt. It's how we 
play them.
   
Mike Parnos, Options Therapist and CPTI Master Strategist
 

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


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