Option Investor
Newsletter

Daily Newsletter, Tuesday, 11/16/2004

HAVING TROUBLE PRINTING?
Printer friendly version
The Option Investor Newsletter                 Tuesday 11-16-2004
Copyright 2004, All rights reserved.                       1 of 3
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Finally, A Pause To Reload
Futures Markets: See Note
Index Trader Wrap: H-Pow!
Market Sentiment: No Surprises


Posted online for subscribers at http://www.OptionInvestor.com
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
      11-16-2004           High     Low     Volume   Adv/Dcl
DJIA    10487.65 - 62.60 10549.79 10477.95 1.73 bln 1243/1999
NASDAQ   2078.62 - 15.50  2087.30  2073.35 1.91 bln 1158/1937
S&P 100   562.26 -  3.83   566.09   562.19   Totals 2401/3936
S&P 500  1175.43 -  8.38  1183.81  1175.32 
SOX       427.38 -  1.96   431.00   422.57
RUS 2000  617.89 -  5.97   623.86   617.80
DJ TRANS 3572.19 - 39.30  3611.96  3570.45
VIX        13.21 -  0.17    13.67    13.20
VXO (VIX-O)14.00 -  0.21    14.69    13.79
VXN        18.60 +  0.10    18.95    18.52 
Total Volume 3,961M
Total UpVol  1,297M
Total DnVol  2,592M
Total Adv  2804
Total Dcl  4457
52wk Highs  414
52wk Lows    65
TRIN       1.58
NAZTRIN    0.72
PUT/CALL   0.71
************************************************************

Finally, A Pause To Reload
by Jim Brown

After three weeks of a sustained uptrend the market
finally decided to take a day off and rest its weary
legs. The surge to new highs has been relentless and
those not already long have been wringing their hands
in anguish over the thought of having to go long at
new highs with no profit taking for a safer entry. 
Those fears have been calmed after today and now all
they need is confirmation of new upward movement to 
hook them with the promise of higher highs. 

Dow Chart

 
Nasdaq Chart

 
SPX Chart

 

The morning dip was blamed on a higher than expected
inflation reading from the Producer Price Index. The
PPI may have been blamed but they could just as easily
blamed it on the moon or sunspots. The market was very
extended and just needed to rest and the PPI was the
best excuse market reporters could find. The PPI did
jump +1.7% and well over expectations for +0.5%. This
was the largest gain in fourteen years and produced a
form of sticker shock for those not paying attention. 

Those pausing for a minute to look under the hood saw
that it was directly related to the spike in oil and
the hurricane and those factors causing the bounce are
already abating. Oil spiked to $55 on pre election 
terrorist fears and speculative excess and that is
already fading as expected. The impact to the PPI from
fuel was enormous at +4.12% and distorted the headline
number significantly. Another component causing trouble
was food which was driven higher by produce and feed
shortages caused by the hurricane damage and supply
disruption. Individually vegetables jumped +34.2%, 
gas +17.3% and fuel oil +17.9%. The headline number
got all the attention but ex-food/energy it was a tame
+0.3%. Lots of smoke but the fire is already out. This
was a slam dunk for traders and should have never 
caused more than a momentary blip for news dissemination.
Instead they looked at the calendar and saw the Consumer
Price Index due out tomorrow and took a pass on new
positions until that news is out on the consumer level.

The Chain Store Sales fell -0.4% for the week ended 
Nov-13th and that makes four of the last five weeks
the index has fallen. Last weeks +1.3% jump turned
out to be an anomaly and could not be continued. Sales
on a year over year basis have been running on about
a +3% clip and that trend continued. The ICSC is 
projecting holiday sales of +3% to +4% for both 
November and December. If oil does continue lower,
something we cannot count on, then consumers will 
feel a pressure release that could lead to more 
spending. 

The November NAHB Housing Index was flat at 71 with
October and that is also the 12-month high. Builders
continue to be positive despite a minimal drop in
traffic to 50 from 52. It is fall and weather does
diminish idle shoppers. Those that really want to 
buy a new home are not deterred. The string of months
at 50 or higher reached seven months and the longest 
string since the late 1990s. The expectations component
is holding at 80 and very optimistic. Maybe too 
optimistic in light of the current uncertainty and
the Fed rate hike process. 

For Wednesday we have the CPI, Residential Construction,
Industrial Production, Mortgage Applications and Oil
and Gas Inventories. Short of a disaster that is not
energy related in the CPI I doubt that will be a factor
for the market. The oil inventories could either send
prices sharply lower or reverse the current drop and
could be the most important release. 

After the bell tonight HPQ reported earnings that beat
the street by +4 cents and raised their estimates for 
the first half of 2005. Not only did they have their
best printer quarter ever, HPQ said they strengthened
their competitive position with significant new offerings
in storage, blade servers, imaging, printing and digital
entertainment. HPQ said it had record revenues in every
division and every region that helped push profits up
+26%. Shares of HPQ jumped +10% in after hours trading.
HPQ raised estimates for both revenue and earnings for
the first half of 2005. 

Network Appliance (NTAP) also announced earnings that
beat the street by +2 cents and raised guidance for
the current quarter and full year. NTAP said there
was rising strength in all product lines and all 
geographies. They especially saw strength in Japan 
and from the Federal Government which was spending
heavily in homeland defense applications requiring
massive amounts of data. NTAP projected revenue in
the current quarter to grow +35% to +38% year over 
year. NTAP soared nearly +10% in after hours trading.

Unfortunately the good news from HPQ and NTAP did not
cross over to the broader market. Futures ceased their
closing drop on the news but failed to move higher
but they do have a positive bias. Several challenges
still need to be overcome. Intel was downgraded today
from a buy to hold at Wedbush Morgan and it was 
downgraded on Monday to underperform from buy at First
Albany. On Friday Wells Fargo initiated coverage with
a SELL. While the tech analyst bears were ganging up
on Intel the stock continued to set new three month
highs and closed only three cents below those highs.
Intel may not be able to hold the SOX up all by itself
but it is definitely bucking the downgrade trend. The
SOX tried to hold the higher ground today above 430 
but could not maintain traction. The SOX only lost 
-1.96 so it was still a good performance. Having HPQ
and NTAP both beat and raise estimates tonight the 
potential for a new SOX high tomorrow is pretty good. 
Ironically HPQ made a specific note of strong Intel
server sales. Guess those Intel bears will be road 
kill again.

In order for that new SOX high to hold the investing
public will have to overcome caution from the Goldman
Sachs CIO survey released today. Goldman found that
CIOs were more upbeat about 2005 but 2004 was not
going to end with a bang. The 2004 IT growth was
likely to end up between +3% and +4% according to the
survey. Actually that is much higher than previous
estimates but it is still lackluster. More bad news
was the prospect for only +2% to +4% growth for 2005.
This is also better than prior estimates at +1.9% but
still lackluster. It is considered a recovery year 
and historically there was substantially stronger
double digit growth in past recoveries. Analysts and
traders could not decide to be excited or worried
about the improved forecast. Goldman said Dell, HPQ,
NTAP, EMC, MSFT and SYMC were gaining market share in
terms of IT budgets with SUNW and CA losing ground. 

The markets opened weak on not only the PPI but on
numbers from Wal-Mart that failed to impress. Earnings
were inline with estimates but profits failed to meet
Wal-Mart's hopes. They blamed the slippage on high gas
prices and budgets experiencing an energy crisis. They
did say sales were ramping up nicely into the holidays
and they are expecting same store sales growth between
+2% and +4%. WMT lost -81 cents for the day but the
results impacted the entire retail sector. 

The Dow could not find a bid at the open and fell from
yesterday's 10550 close to 10480 before any dip buyers
appeared. Once they did appear they were unable to 
return it to its previous glory but they were successful
in holding the index to barely more than a 25 point
range around 10500 the rest of the day. Considering
the massive gains of nearly +850 points over the last
three weeks the minor -62 point loss was only a drop
in the bucket. Should we really break the trend and
move lower we should find initial support in the 10470
range with very strong support back at 10400. With the
HPQ/NTAP news after the bell I would be really surprised
to see a continued dip but anything is possible given
the huge gains. 

The Nasdaq dropped -15 points to 2075 and found very
decent support all afternoon. With the tech news after
the bell spiking Dell, NTAP, SUNW, INTC, the SMH and
many others in after hours I suspect the Nasdaq will 
open higher without a new pre open disaster. Should 
we move lower there is very strong support in the 
2040 range but a drop of that magnitude would call
into question the future of the current rally. 

If you look at the charts above you will see that the
Dow and Nasdaq failed exactly where they should have
failed after the strong run. While they may not just
catapult over that resistance tomorrow or even this
week I believe they will stay in close proximity for
the next attack. 

There are a lot of traders waiting for a strong pull
back that may never come and I would be very surprised
if it appeared this week. If you watched the market 
gain hundreds of points without you over the last two
weeks would you want to face that possibility again
as we near Thanksgiving week? Historically the holiday
week is bullish and traders hoping for entries before
that week are quickly running out of time. They will
have to act quick on any remaining weakness and hope
there is not a bigger problem lurking in our future.
This is option expiration week and the first two days
have not been exciting. Those short and hoping for a
continued pull back to cover are probably more nervous
than a cat in a room full of rocking chairs tonight.
The earnings have given the futures an upward bias and
a positive CPI before the open could reawaken the bulls.
Those waiting for Nasdaq 2050 to enter long positions
could be waiting a long time. 

Shifting gears slightly I am starting to see more
negative press about possible market direction once
we get to January. While I agree the direction for 
2005 could be a challenge I don't think wasting time
worrying about it now is a worthwhile effort. Remember,
those fund managers still behind the curve need to 
capture some performance over the next six weeks and
they will be providing the market momentum for the
rest of us. Plus, retail investors have awakened
from their sleep with newspapers touting the current
rally. Money is pouring into funds and that money has
to be put to work. TrimTabs said $1.8 billion flowed
into the SPY on Monday alone. So far this month $6B
has flowed into US Equity funds and $4.6B into ETFs.
This is the biggest influx of cash since March. Unless
the spigot suddenly runs dry tomorrow that inflow 
should continue through the Thanksgiving rally. Also
helping this flow of cash is the continued low price
of oil. Oil closed at $46.10 today and while still
above the 100 day average at $45.50 those hoping for
a rebound at that support should be getting worried. 
That worry could lead to further shifting of money 
from oil to equities. If you are bullish on the market
you should be looking for a low CPI tomorrow, higher
industrial production and a sharp rise in oil inventories
at 10:30. Those three things should erase any lingering
doubts traders might have about being out of the market
ahead of Thanksgiving. 

Buy the dips until the trend changes. 

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*************************
 
Quit paying fees for limit orders or minimum equity
  * No hidden fees for limit orders or balances 
  * $1.50 /contract (10+ contracts) or $14.95 minimum.
  * Zero minimum deposit required to open an account
  * Free streaming quotes and Dow Jones news
 
Go to http://www.optionsxpress.com/marketing.asp?source=oinvest34
 
Note: Options involve risk. Risk disclosure: 
http://www.optionsxpress.com/welcome_risk_index.htm
 
**************************************************************


*****************
INDEX TRADER WRAP
*****************

H-Pow!

Broader market declines had the look of profit taking in 
Tuesday's session, where despite a lower trade in oil, 
inflationary woes at the producer level had the major indices and 
bulk of sectors all relinquishing a portion of recent week's 
gains.

But that might have been the extent to profit taking among 
computer-related technology after Dow component Hewlett-Packard 
(NYSE:HPQ) $19.68 surged to $21.14 in its extended session after 
handily beating its own lowered expectations.

"After a challenging third quarter I am pleased with the progress 
we made in the fourth quarter," HP Chairman and Chief Executive 
Carly Fiorina said on a Tuesday evening conference call.

Specifically, she said that the supply issues that caused a 
dramatic shortfall during third quarter had been solved.  "This 
issue is now behind us," Ms. Fiorina said.  She said HP shipped a 
record number of standard Intel servers during the quarter, with 
unit shipments rising 18% in the fourth quarter. 

The Palo Alto, California-based company reported net income for 
its fiscal fourth quarter ended October 31 of $1.09 billion, or 
37 cents per share, compared with $862 million, or 28 cents per 
share, a year earlier. 

Revenue rose to $21.4 billion from $19.9 billion. 
Excluding items, HP posted a profit of 41 cents per share, 
compared with its previous forecast for a per-share profit of 35 
cents to 39 cents.

Shares of Intel (NASDAQ:INTC) $23.84 +0.29% rose to $24.08 in 
Tuesday's extended session.  The NASDAQ-100 Tracker (AMEX:QQQ) 
$38.59 gained 12 cents to $38.71, while the Semiconductor HOLDRs 
(AMEX:SMH) $33.53 -0.29% rose 35 cents to $33.88, just 10-cents 
shy of their WEEKLY R2 in the evening session.

U.S. Market Watch - 11/16/04 Close

 

Hewlett-Packard (NYSE:HPQ) is a component of several indices in 
our U.S. Market Watch, and would be the 32nd-largest weighted 
stock in the S&P 100 Index (OEX.X).

With just 35 components in the Morgan Stanley High Tech 35 Index 
(MSH.X) and just 30 component in the AMEX Computer Technology 
Index (XCI.X), tomorrow's price action in HPQ could be an index 
mover.

Maybe that little spat of buying this afternoon that had the 
SOX.X briefly bidding into positive territory was some good old 
fashioned buying if "smart money" knew of HP's earnings.

AMEX Computer Tech (XCI) - 10-point box size

 

While the XCI tends to shadow the percentage moves in the Morgan 
Stanley High Tech 35 Index (MSH.X), the conventional 10-point box 
chart of the XCI.X provides a very good test for additional 
strength near-term.  A "low pole warning" is similar to that 
discussed previously in the MSH (conventional 5-point box) where 
the test for strength is a trade at 720, which would unleash a 
triple top buy signal and break the bearish resistance trend.  

There's an old point and figure saying that "the first test of 
bullish support trend can be painful for a bear" (see March 2003 
trade at 470) and the same can be true that "the first test of 
bearish resistance can be painful for a bull."  

Will bears defend the 720 level, or is the second leg of the bull 
market simply to powerful to deny?

From a risk/reward basis, you can be certain that bears will be 
trying to leverage off the 720 level with a stop so near.  If 
they turn to cover at 720, that's where the power of a triple top 
buy signal is often found as demand (X) can build.

In early September (9), Dorsey/Wright and Associate's Computers 
Bullish % (BPCOMP) reversed up to "bull alert" status at 24% and 
remains bull alert at 46%.  It would currently take a reading of 
72% for this sector to achieve "bull confirmed" status.  In 
February (2) of this year, this sector bullish % reversed lower 
to "bear alert" and in March (3) fell further to "bear confirmed" 
at 56%.  

Here's a quick look at the XCI's bar chart with conventional 
retracement overlaid.

Computer Technology Index (XCI.X) - Daily Intervals

 

This week's WEEKLY R2 would line up nicely with that 720 level 
noted in the PnF chart as the big test for bulls to break 
through.  Buyers seemed very eager to snap up "big tech" on that 
recent one-day dip to 50% retracement of 686.25 as if to say, 
"the gig is up!"

Applied Materials (NASDAQ:AMAT) $16.76 -0.11% quarterly earnings 
are slated for release tomorrow evening.  

But let's not forget about tomorrow morning's weekly crude oil 
inventory report.  I need to get you this week's Pivot Levels.  
In today's Market Monitor, (12:20 and 12:28 PM EST) I ran through 
the 30-minute interval chart as well as $1, $0.50 and $0.25 box 
size point and figure charts of the Continuous Crude Oil Contract 
($WTIC).

While I (Jeff Bailey) am not ignoring, or being complacent about 
the October PPI data, let's realized that the Commerce Department 
noted that energy price gains were largely responsible for the 
PPI increase in October.

Here's a 30-minute interval chart of the December Crude Oil 
futures (cl04z) that we look at from time to time with QCharts' 
weekly pivot levels turned on.

December Crude Oil futures (cl04z) - 30-minute intervals

 

As time has passed and oil prices have fallen, the I want to make 
sure we're all alert that we're now nearing that bullish support 
trend on the $0.25-box chart of Stockcharts.com's $WTIC point and 
figure chart.  

Now, the first sign of meaningful strength (demand) in the $0.25 
box chart would be a trade at $48.25 at this point.  With that 
said, it is notable that December Crude Futures (cl04z) haven't 
seen the light of day above a WEEKLY Pivot just over two weeks.  
Monday's low caught a bid at WEEKLY S2 $45.43, but a unison break 
of WEEKLY S2 and the $45.00 level should pave the way for a test 
of the current bearish vertical count.

Believe me.  Traders and investors may have shrugged their 
shoulders at today's PPI data, fully knowing that oil prices have 
fallen from their October highs, but a resurgence in oil, 
especially much above $52 would most likely cap recent broader 
market equity gains in fast order.

Market Snapshot / Internals - 11/16/04 Close

 

The only comments I would have on today's internals is that there 
was stock hitting bids, BIG bids as the TRIN was on the rise 
pretty much throughout the session.  At the mid-point of today's 
session I thought volume levels were "average" or slightly below 
what we've been seeing.  I was surprised by the final tally at 
the NASDAQ where a rather quiet session finds 1.9 billion traded.  
It is that volume at the NASDAQ combined with rising TRIN 
suggesting to me that there were some big bids taking in some 
stocks on today's weakness.  

Pivot Matrix - 

 

In tonight's extended session, the QQQ after-hours highs comes at 
tomorrow's DAILY R1.  Probably just a coincidence, but may hint 
that sellers will try and hold firm into tomorrow morning's 10:30 
AM EST release of crude oil inventories, and at this point, why 
flinch with AMAT slated to release tomorrow, where there's some 
hope of a knee-jerk reaction lower on Thursday.  Today's high on 
the QQQ came twice.  Once early in the morning, then later in the 
afternoon.  If bears do flinch and don't like what HPQ had to 
say, that $38.68 intra-day double topping action might find some 
buyers.

Tentative morning resistance in the SPX is present at DAILY Pivot 
and WEEKLY Pivot.  

A quick check of the S&P Depository Receipts (AMEX:SPY) $117.88 
-0.71% has last tick in tonight's extended session at $117.98, a 
couple of cents shy of its DAILY Pivot.

The QQQ did briefly penetrate its WEEKLY Pivot ($38.35) by 3 
cents, but unless the market knows of anything "worse" at AMAT, 
which HPQ's quarterly earnings may have reversed, the QQQ should 
stay firm at or above WEEKLY Pivot in my opinion.

Jeff Bailey

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

No Surprises
- J. Brown

Okay the big jump in wholesale prices was a surprise but was the 
pull back really a surprise?  I hope not.  We've been looking for 
a dip for days now.  If not for the rise in inflation via the PPI 
index stocks may not have dipped at all.  The news was probably 
just the excuse traders needed to do some much needed profit 
taking.  Even with the excuse to sell the weakness was not very 
deep.  

I would hope for more profit taking tomorrow but a positive 
earnings report from tech heavy-weight Hewlett-Packard (HPQ) 
after the bell on Tuesday could spoil that.  The company came in 
above estimates and offered a positive outlook on the fourth 
quarter.  Normally this would put a bid under tech stocks, 
especially hardware stocks tomorrow.  

Of course tomorrow brings a parade of economic data.  First and 
foremost is the Consumer Price Index or CPI.  If the CPI comes in 
way above expectations it could/should weigh on the markets.  
Wednesday also brings the industrial production and capacity 
utilization numbers.  Plus, Wall Street will be digesting the 
latest housing starts and building permits data.  

Another pivotal piece of evidence for the tech sector and 
specifically the semiconductor sector will be Applied Material's 
(AMAT) earnings.  Wall Street is looking for 26 cents a share 
from the planet's largest chip equipment maker.  AMAT's results 
and guidance could have a big affect on the SOX and thus 
indirectly on the NASDAQ. 

FYI: the COT data at the bottom of this report has been updated 
for the latest data available on 11/09/04.

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

Market Averages

DJIA ($INDU)

52-week High: 10753
52-week Low :  9585
Current     : 10487

Moving Averages:
(Simple)

 10-dma: 10404
 50-dma: 10148 
200-dma: 10244 



S&P 500 ($SPX)

52-week High: 1170
52-week Low : 1031
Current     : 1175

Moving Averages:
(Simple)

 10-dma: 1167
 50-dma: 1128
200-dma: 1120



Nasdaq-100 ($NDX)

52-week High: 1559
52-week Low : 1301
Current     : 1548

Moving Averages:
(Simple)

 10-dma: 1532
 50-dma: 1455
200-dma: 1438



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

CBOE Market Volatility Index (VIX) = 13.21 -0.17
CBOE Mkt Volatility old VIX  (VXO) = 14.00 -0.21
Nasdaq Volatility Index (VXN)      = 18.60 +0.10 


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

          Put/Call Ratio  Call Volume   Put Volume

Total          0.71      1,007,709       713,584
Equity Only    0.59        801,638       474,116
OEX            1.62         30,248        49,147
QQQ            0.60         80,552        48,923


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

Bullish Percent Data

           Current   Change   Status
NYSE          71.5    + 1     Bear Correction
NASDAQ-100    71.0    + 2     Bull Confirmed
Dow Indust.   63.3    + 0     Bull Confirmed
S&P 500       72.2    + 1     Bull Confirmed
S&P 100       72.0    + 1     Bull 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: 0.98
10-dma: 0.93
21-dma: 0.94
55-dma: 1.00


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    1042      1130
Decliners    1788      1899

New Highs     197       130
New Lows       13        14

Up Volume    458M      790M
Down Vol.   1248M     1062M

Total Vol.  1734M     1885M
M = millions


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

Commitments Of Traders Report: 11/09/04


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

The difference between longs and shorts on the commercial side
continues to narrow suggesting no bias one way or the other.
Small traders are also somewhat neutral with a mild bullish
bias.

Commercials   Long      Short      Net     % Of OI
10/19/04      432,945   441,041   ( 8,096)   (0.9%)
10/26/04      441,263   445,992   ( 4,729)   (0.4%)
11/02/04      446,192   441,676   ( 4,516)   (0.4%)
11/09/04      447,779   449,171   ( 1,392)   (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
10/19/04      147,148   124,827    22,321     8.2%
10/26/04      138,201   121,275    16,926     6.5%
11/02/04      136,290   132,040     4,250     1.5%
11/09/04      148,415   136,325    12,090     4.2%

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

Commercials traders appear to be trying to capitalize on the 
S&P's overbought status.  Short positions soared and the latest
data is one of the most bearish readings of the year.  As is
usually the case the small traders is on the opposite side of
the play with one of the most bullish readings of the year.


Commercials   Long      Short      Net     % Of OI 
10/19/04      264,860   531,541   (266,681)  (33.4%)
10/26/04      276,128   509,552   (233,424)  (29.7%)
11/02/04      307,053   580,081   (273,028)  (30.7%)
11/09/04      337,164   672,903   (335,739)  (33.2%)

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
10/19/04      353,903     66,027   287,876    68.5%
10/26/04      345,908     64,061   281,847    68.7%
11/02/04      395,029     63,746   331,283    72.2%
11/09/04      392,253     58,999   333,254    73.8%

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 remain bullish on the NASDAQ.  Meanwhile
small traders upped their positions on both longs and shorts
but hit a new bearish extreme as far as net short positions.


Commercials   Long      Short      Net     % of OI 
10/19/04       52,630     31,940    20,690   24.4%
10/26/04       53,233     31,323    21,910   26.2%
11/02/04       53,002     31,231    21,771   25.0%
11/09/04       54,509     33,016    21,493   24.5%

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
10/19/04       10,462    25,243   (14,781)  (41.3%)
10/26/04       10,521    25,388   (14,867)  (42.8%)
11/02/04        8,886    36,621   (27,735)  (61.3%)
11/09/04       10,213    38,251   (28,038)  (57.8%)

Most bearish reading of the year: (28,038) - 11/09/04
Most bullish reading of the year:  19,088  - 01/21/02

DOW JONES INDUSTRIAL

Not much action in the commercials as they remain evenly
divided between longs and shorts.  The same can be said for
small traders this past week with a split between bulls and
the bears.


Commercials   Long      Short      Net     % of OI
10/19/04       25,385    24,213    1,172       2.3%
10/26/04       25,707    24,855      852       1.6%
11/02/04       25,319    24,261    1,058       2.0%
11/09/04       22,863    22,463      400       0.8%
 
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
10/12/04        8,814     9,167   (  353)   ( 1.9%)
10/19/04        8,327     6,015    2,312     16.1% 
10/26/04        8,405     6,336    2,069     14.3%
11/02/04        7,952     6,306    1,261      8.8%
11/09/04        6,165     6,483    ( 318)   ( 2.5%)

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


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

Insiders are Buying these 6 Rocket Stocks.


In the last few weeks, we have pinpointed insider buying on six 
stocks that have the potential to deliver stratospheric gains. 

Click here for our SPECIAL REPORT on these 6 stocks insiders are 
buying and why you should too. 


http://www.insidermoves.com/default.asp?aid=618

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


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

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

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

To subscribe you may go to our website at

www.OptionInvestor.com

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

 "Contact Support"

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

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


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

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


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

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

Contact Support

The Option Investor Newsletter                  Tuesday 11-16-2004
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: COP, DHR, EBAY, EOG, FDX, GDW, IBM, LEH, MUR, OSK, 
                   QCOM, SLB,  
New Calls Plays: None
Put Play Updates: MXIM
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


************************Advertisement*************************
 
Quit paying fees for limit orders or minimum equity
  * No hidden fees for limit orders or balances 
  * $1.50 /contract (10+ contracts) or $14.95 minimum.
  * Zero minimum deposit required to open an account
  * Free streaming quotes and Dow Jones news
 
Go to http://www.optionsxpress.com/marketing.asp?source=oinvest34
 
Note: Options involve risk. Risk disclosure: 
http://www.optionsxpress.com/welcome_risk_index.htm
 
**************************************************************

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

ConocoPhillips - COP - close: 86.13 change: -0.37 stop: 81.99

Another drop on crude prices appeared to weigh on energy stocks.  
December crude oil contracts have been falling for three weeks in 
a row and the commodity is now testing its simple 100-dma.  Given 
the length of the profit taking in crude one could argue it's 
time for a bounce.  Meanwhile the oil sector has seen some profit 
taking this week and COP is slipping towards short-term support 
at $86.00.  Readers can watch for a bounce from $86 or if the 
selling continues look for a bounce from $85.00 as a new bullish 
entry point.  We are keeping an eye on the technicals as COP's 
MACD has reversed back into a sell signal.  

Picked on November 03 at $85.50
Change since picked:     + 0.63
Earnings Date          10/27/04 (confirmed)
Average Daily Volume =      3.0 million 
Chart =


---

Danaher - DHR - close: 57.03 change: -0.16 stop: 53.99      

We've been expecting some profit taking in DHR so it's no 
surprise to see some this week.  The stock has been overbought so 
the minor pull back is already pushing the MACD indicator toward 
a new sell signal.  We've been suggesting that readers do their 
own profit taking and then watch for a bounce once the pull back 
is over.  Right now the $55-56 levels should act as support for 
DHR.  In the news DHR announced a transition plan for Senior VP 
of finance Daniel Comas to succeed CFO Patrick Allender who is 
planning on retirement in the next couple of years.
 
Picked on October 27 at $54.99
Change since picked:    + 2.04
Earnings Date         10/21/04 (confirmed)
Average Daily Volume =     1.3 million 
Chart =


---

eBay Inc. - EBAY - close: 107.92 chg: -1.50 stop: 99.99     

We've been expecting some profit taking in EBAY so Tuesday's 
decline was not a surprise.  Furthermore we don't believe the dip 
is over and would look for EBAY to test its simple 10-dma near 
$105.  Fortunately, volume has been low on the pull back and 
that's what we want to see a pause in the buying rather than an 
uptick in the selling.  It's not too late to do some profit 
taking of your own if you didn't do so on Friday or Monday.

Picked on November 80 at $103.69 
Change since picked:      + 4.23
Earnings Date           10/20/04 (confirmed)
Average Daily Volume =      10.4 million 
Chart =


---

EOG Resources - EOG - close: 67.01 change: -0.49 stop: 63.99

As part of the oil group EOG has seen some profit taking this 
week as well.  Readers can look for a dip toward $65.00 and/or 
its simple 50-dma.  We would then consider a bounce above $65 as 
a new bullish entry point. 

Picked on November 14 at $ 68.37
Change since picked:      - 1.36
Earnings Date           10/26/04 (confirmed)
Average Daily Volume =       1.1 million    
Chart =


---

Fedex Corp - FDX - close: 93.74 change: -1.22 stop: 89.99     

No surprises here.  We've been warning that the Transports and 
FDX were looking overbought and due for some profit taking.  The 
question now is when/where will it stop.  The first level of 
support would be the simple 10-dma just over $92.50 but we don't 
believe that will stall the selling.  It would be bullish to see 
FDX consolidate sideways around the $92 level but we're expecting 
a pull back toward $90, thus our suggestions the past few days to 
take some money off the table.  We're holding FDX because our 
end-of-year target is the $100 region. 

Picked on October 21 at $89.45 
Change since picked:    + 4.29
Earnings Date         09/22/04 (confirmed)
Average Daily Volume =     1.5 million 
Chart =


---

Golden West Fncl - GDW - cls: 120.00 chg: -1.01 stop: 114.99     

Shares of GDW pulled back a bit with the financials in some 
overdue profit taking.  It would be bullish to see GDW hold here 
at the $120 level but we would look for a pull back to support at 
$118.00.  A bounce from $118 would be the next bullish entry 
point.  No change in our strategy.

Picked on November 10 at $118.15
Change since picked:      + 1.85
Earnings Date           10/21/04 (confirmed)
Average Daily Volume =       583 thousand   
Chart =


---

Intl Business Mach. - IBM - close: 94.89 chg: -1.03 stop: 89.99     

IBM is showing exceptional strength this week resisting any 
profit taking on Monday and only sliding one percent in today's 
pull back.  We remain very bullish on IBM and continue to target 
$99-100 by year's end but the stock is very overbought and due 
for a significant dip.  Readers looking for bullish entry points 
can wait for a dip toward the $92-93 range.  

Picked on October 27 at $90.00
Change since picked:    + 4.89
Earnings Date         10/18/04 (confirmed)
Average Daily Volume =     4.7 million 
Chart =


---

Lehman Brothers - LEH - close: 82.98 chg: -1.49 stop: 79.95  

Some overdue profit taking in the XBD broker-dealer index was 
more than echoed in shares of LEH.  The stock under performed its 
peers with a 1.76 percent drop.  We are not excited to see the 
MACD signal produce a new sell reading but we've been expecting 
some consolidation. Readers can watch for LEH to pull back toward 
the $82 level, which should act as support.  

Picked on October 26 at $80.60 
Change since picked:    + 2.38 
Earnings Date         09/21/04 (confirmed)
Average Daily Volume =     2.0 million 
Chart =


---

Murphy Oil - MUR - close: 78.42 change: -0.51 stop: 77.49

There's a reason we used a trigger on MUR.  We were encouraged by 
the potential bottom and the upturn in shares but wanted to see 
some confirmation of the new leg higher.  Fortunately, we're 
still sitting on the sidelines as the stock experiences two days 
of profit taking.  Aggressive traders can watch for another 
bounce from support near $77.50.  We are still waiting for MUR to 
trade over $82 and hit our TRIGGER at $82.25.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           10/26/04 (confirmed)
Average Daily Volume =       500 thousand   
Chart =


---

Oshkosh Truck - OSK - close: 62.95 change: -0.34 stop: 57.00

It's the same story here on OSK.  Shares experienced some profit 
taking but remain overbought and vulnerable for more.  The 
technicals are beginning to weaken.  We'd watch for a pull back 
toward $60 and buy the bounce as a new entry point. 

Picked on November 07 at $ 62.16
Change since picked:      + 0.79
Earnings Date           10/28/04 (confirmed)
Average Daily Volume =       205 thousand   
Chart =


---

Qualcomm - QCOM - close: 39.64 change: -0.55 stop: 37.50

Monday's opening spike higher was enough to hit our TRIGGER to go 
long at $40.51.  Unfortunately, QCOM couldn't hold its gains and 
fell back under its simple 50-dma.  Today's profit taking pulled 
QCOM for a 1.36 percent loss and back under the $40.00 mark.  We 
would expect QCOM to retest support at its simple 100-dma near 
$38.00.  Just remember that our stop loss is at $37.50. We would 
not suggest new bullish positions until QCOM traded back over 
$40.50.

Picked on November 15 at $ 40.51
Change since picked:      - 0.87
Earnings Date           11/03/04 (confirmed)
Average Daily Volume =      13.9 million    
Chart =


---

Schlumberger - SLB - close: 64.10 change: +0.37 stop: 61.00

SLB is another oil play that has been slipping as crude oil 
slides lower.  We still expect the group to turn higher but it 
looks like SLB could retest support at the $62.00 level before 
bouncing again.  Be patient with your entries and wait for SLB to 
trade back over $65 again. 

Picked on November 12 at $ 65.05
Change since picked:      - 0.95
Earnings Date           10/22/04 (confirmed)
Average Daily Volume =       3.9 million    
Chart =



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

None


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

SEE WARREN BUFFETT'S LATEST DISCLOSED STOCK PORTFOLIO


Now you can follow the investment master's actual moves.

To get a FREE report that details Warren Buffett's strategy and 
reveals his most recently disclosed, ACTUAL stock picks, Click HERE!


http://www.bigmoneywatch.com/default.asp?aid=626

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


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

Maxim Integrated - MXIM - close: 42.52 chg: -0.72 stop: 45.51

The SOX was giving us a scare yesterday as the semiconductor 
index broke out over the 425 level and pushed through technical 
resistance at its exponential 200-dma. This sent shares of MXIM 
over the $43 level, which we felt was the first line of defense 
for the bears.  We still suggest caution given the SOX's strength 
but MXIM turned lower today giving bears a boost of confidence.  
We would not suggest new bearish positions until MXIM traded back 
under the $42 level. 

Picked on November 10 at $42.04
Change since picked:     + 0.48
Earnings Date          10/05/04 (confirmed)
Average Daily Volume =      6.0 million 
Chart =



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

None

************************Advertisement*************************
 
Get your FREE weekly charts of the NASDAQ!
 
Hot Stix’ stock market report reveals simple, powerful strategies 
for profiting from the QQQ - whether down or up!
 
http://www.hotstix.com/public/weekly.asp?aid=755
 
**************************************************************


**********
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 11-16-2004
Copyright 2004, All rights reserved.                        3 of 3
Redistribution in any form strictly prohibited.


In Section Three:

Watch List: Another list of breakout and breakdowns.
Spreads & Straddles: Stocks Stumble On Inflation Concerns!
Premium Selling Plays: Naked Puts & Calls


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

Another list of breakout and breakdowns.


___________________________________________________________________

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.
___________________________________________________________________


Avid Technology - AVID - close: 56.90 change: +0.17

WHAT TO WATCH: The recent surge in shares of AVID pushed the 
stock through major resistance at $55.00.  Chart readers will 
note the move followed a two-week consolidation and was fueled by 
very strong volume.  This looks like a bullish entry point and 
the P&F chart confirms the breakout.  The P&F currently points to 
a $70 target.  We would watch for a pull back toward $55 and buy 
a bounce with a $60 target. 

Chart=


---

Caterpillar - CAT - close: 89.88 change: +0.19

WHAT TO WATCH: CAT has surprised us the past couple of days.  
Shares have been resistant to profit taking.  Yet one can see 
that the momentum is beginning to wane.  We like CAT's breakout 
over $85 and believe the trend will continue but we'd like to buy 
a dip.  Watch for a pull back into the $85-86 range and then wait 
for the bounce to begin.  

Chart=


---

The Corporate Executive Board Co - EXBD - cls: 67.64 chg: +2.56

WHAT TO WATCH: We had been hoping that the very strong EXBD would 
pull back toward the bottom of its rising channel or even round-
number support at $60.00 so we could jump on this band wagon.  
Unfortunately, we've had no such luck.  The consolidation between 
$62 and $65 has blossomed into another breakout to new all-time 
highs.  Technical traders will also note the rising volume 
supporting the rally.  We're watching for a pull back (again).

Chart=


---

Zebra Technology - ZBRA - close: 48.48 change: -3.57

WHAT TO WATCH: ZBRA broke its long-term, two-year up trend in 
late October when shares fell through their simple 100-dma and 
then the $55.00 level.  After bouncing from its 200-dma the 
bounce failed again under the 100-dma, which is not uncommon.  
Yet now the stock is selling on sharply on big volume.  Technical 
traders aren't supposed to care about the story behind the 
stock's movement and instead focus on the pattern.  Right now 
that pattern is screaming trend change.  Watch for a failed rally 
under $52.00 as a new bearish entry point.  Yet be aware that the 
P&F chart only points to a $45 (bearish) target.  

Chart=



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

RKY $72.62 +0.99 - Watch for a pull back toward round-number 
support at $70.00 and consider a bounce.

MBT $139.00 -3.50 - Nimble traders may want to keep an eye on 
MBT.  Shares are nearing trading range support near $138-137.  A 
breakdown here could lead toward a drop to $130-125.

NAV $40.60 +0.05 - NAV is resisting any profit taking and 
clutching to its recent breakout over resistance at $40.00 and 
its simple 200-dma.

ITT $84.07 -0.82 - ITT is seeing some profit taking as expected.  
We'll watch for a bounce from $82.00.

ITW $94.35 -1.20 - ITW is seeing some profit taking as expected.  
We'll watch for a bounce from $90 or the 200-dma.


************************Advertisement*************************
 
Quit paying fees for limit orders or minimum equity
  * No hidden fees for limit orders or balances 
  * $1.50 /contract (10+ contracts) or $14.95 minimum.
  * Zero minimum deposit required to open an account
  * Free streaming quotes and Dow Jones news
 
Go to http://www.optionsxpress.com/marketing.asp?source=oinvest34
 
Note: Options involve risk. Risk disclosure: 
http://www.optionsxpress.com/welcome_risk_index.htm
 
**************************************************************



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

Stocks Stumble On Inflation Concerns!
By Ray Cummins

Equity values retreated Tuesday after a government report said
wholesale prices surged in October.

U.S. producer prices increased 1.7% with most of the inflation
in finished goods coming from food and energy.  The core rate,
which excludes food and energy, increased a more moderate 0.3%.
Disappointment over Wal-Mart's (NYSE:WMT) quarterly sales also
weighed on investors and they decided to take profits after the
recent rally.  The Dow Jones Industrial Average finished down 62
points at 10,487 while the NASDAQ Composite Index fell 15 points
to 2,078.  The broader S&P 500 Index dropped 8 points to 1,175.
There were nearly two losers for every winner on the New York
Stock Exchange and breadth was similar on the NASDAQ.  Trading
volume was 1.35 billion on the Big Board and 1.88 billion on the
the technology exchange.  Treasury prices closed lower amid new
inflation worries.  The benchmark 10-year note ended 6/32 lower
at 100 10/32, while its yield rose to 4.21%.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
SUMMARY OF CURRENT POSITIONS - AS OF 11/14/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

BSC    94.16  98.55  NOV  80.0  85.0  0.65   84.35   0.65   Open
BTU    60.07  68.46  NOV  50.0  55.0  0.60   54.40   0.60   Open
MRVL   28.84  30.80  NOV  22.5  25.0  0.35   24.65   0.35   Open
COST   44.69  49.12  NOV  40.0  42.5  0.30   42.20   0.30   Open
NEM    46.25  49.65  NOV  40.0  42.5  0.30   42.20   0.30   Open
INSP   47.25  55.83  NOV  35.0  40.0  0.85   39.15   0.85   Open
BG     41.96  48.35  NOV  35.0  40.0  0.50   39.50   0.50   Open
ADBE   53.57  58.97  NOV  45.0  50.0  0.50   49.50   0.50   Open
VRNT   37.73  39.33  NOV  30.0  35.0  0.55   34.45   0.55   Open
OSTK   52.63  60.20  NOV  40.0  45.0  0.60   44.40   0.60   Open
MDC    76.00  79.35  NOV  65.0  70.0  0.50   69.50   0.50   Open
SPF    53.90  58.41  NOV  45.0  50.0  0.60   49.40   0.60   Open
NEM    47.52  49.65  NOV  42.5  45.0  0.35   44.65   0.35   Open
PD     87.54  97.69  NOV  75.0  80.0  0.50   79.50   0.50   Open
EBAY  100.66 109.89  NOV  90.0  95.0  0.60   94.40   0.60   Open
CTX    53.55  55.69  NOV  45.0  50.0  0.50   49.50   0.50   Open
PIXR   84.45  86.54  NOV  75.0  80.0  1.00   79.00   1.00   Open
S      45.88  46.01  NOV  40.0  42.5  0.35   42.15   0.35   Open
VIP   121.49 119.00  DEC 105.0 110.0  0.70  109.30   0.70   Open
WLP   113.90 117.64  DEC 100.0 105.0  0.50  104.50   0.50   Open

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

Although currently profitable, positions in Pacificare Health
Systems (NYSE:PHS), Celgene (NASDAQ:CELG) and Guitar Center 
(NASDAQ:GTRC) have previously been closed to limit potential
losses.


CALL-CREDIT SPREADS

Stock  Pick   Last    Mon  L/C   S/C  Credit   CB    G/L   Status

AMZN   40.47  40.46   NOV  50.0  45.0  0.65   45.65  0.65   Open
CHIR   37.98  31.95   NOV  45.0  42.5  0.30   42.80  0.30   Open
FLIR   54.52  60.70   NOV  65.0  60.0  0.70   60.70 (0.00)  Open?
BIIB   59.82  59.04   NOV  70.0  65.0  0.65   65.65  0.65   Open
IFIN   36.50  40.70   NOV  42.5  40.0  0.30   40.30 (0.40)  Open?
TTWO   32.55  34.62   NOV  37.5  35.0  0.30   35.30  0.30   Open
QCOM   39.50  40.20   NOV  45.0  42.5  0.30   42.80  0.30   Open
SEPR   45.44  46.80   DEC  55.0  50.0  1.00   51.00  1.00   Open
TTWO   33.24  34.62   DEC  40.0  37.5  0.30   37.80  0.30   Open
INTU   43.14  43.48   NOV  47.5  45.0  0.30   45.30  0.30   Open
RIMM   77.75  83.00   NOV  95.0  90.0  0.50   90.50  0.50   Open
ERTS   46.97  47.59   DEC  55.0  50.0  0.65   50.65  0.65   Open
GM     39.97  40.21   DEC  45.0  42.5  0.30   42.80  0.30   Open

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

Investors Financial (NASDAQ:IFIN) became an early-exit candidate
on Friday and Flir Systems (NASDAQ:FLIR), Sepracor (NASDAQ:SEPR)
and Take-Two Interactive (NASDAQ:TTWO) are on the "watch" list.
Positions in Aetna (NYSE:AET), Beazer Homes (NYSE:BZH), Hartford
Insurance (NYSE:HIG), Cigna (NYSE:CI), Chubb (NYSE:CB), Mercury
Interactive (NASDAQ:MERQ), Microchip (NASDAQ:MCHP), J.C. Penney
(NYSE:JCP), SPX Corp. (NYSE:SPW), Pediatrix Medical (NYSE:PDX),
and Express Scripts (NASDAQ:ESRX) have previously been closed.


DEBIT STRADDLES

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

NTES    40.00  51.94   NOV   40.0   40.0    5.00   12.00    Open?
NEW     55.15  64.00   NOV   55.0   55.0    4.70    9.10    Open?
SBUX    54.51  55.30   NOV   55.0   55.0    2.50    2.25    Open?

Straddles in Netease.com (NASDAQ:NTES) and New Century Finance
(NYSE:NEW) have provided large profits, thus conservative traders
should consider "locking-in" gains.  The Starbucks (NASDAQ:SBUX)
straddle is a candidate for "capital preservation" as the brief
post-earnings retreat did not result in a profitable outcome.
Traders who remained in the j2Communications (NASDAQ:JCOM) play
were rewarded with a big move in the stock on Friday, resulting
in a favorable profit for the neutral-outlook position.

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

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

EYET - Eyetech Pharmaceuticals  $45.64  *** Premium-Selling! ***

Eyetech Pharmaceuticals (NASDAQ:EYET) is a biopharmaceutical firm
that specializes in the development and commercialization of novel
therapeutics to treat diseases of the eye.  Its initial focus is
on diseases affecting the back of the eye, particularly the retina.
The company's most advanced product candidate is Macugen, which it
is developing for wet age-related macular degeneration (AMD) and
diabetic macular degeneration (DME).

EYET - Eyetech Pharmaceuticals  $45.64

PLAY (conservative - bullish/credit spread):

BUY  PUT  DEC-30.00  QUJ-XF  OI=1344  ASK=$0.35
SELL PUT  DEC-35.00  QUJ-XG  OI=1707  BID=$0.70
INITIAL NET-CREDIT TARGET=$0.45-$0.55
POTENTIAL PROFIT(max)=9% B/E=$34.55


__________________________________________________________________

XMSR - XM Satellite Radio  $36.13  *** New All-Time High! ***

XM Satellite Radio (NASDAQ:XMSR) is America's #1 satellite radio
service with over 1 million subscribers.  Broadcasting live daily
from Washington, DC, New York City and Nashville, Tennessee at the
Country Music Hall of Fame, XM provides its loyal listeners with
over 100 digital channels of choice: 70 music channels, more than
35 of them commercial-free, from hip hop to opera, classical to
country, bluegrass to blues; and 31 channels of premiere sports,
talk, comedy, kid's and entertainment programming.  Compact and
stylish XM satellite radio receivers for the home, the car, the
computer and even a "boom-box" for on the go are available from
retailers nationwide.

XMSR - XM Satellite Radio  $36.13

PLAY (conservative - bullish/credit spread):

BUY  PUT  DEC-30.00  QSY-XF  OI=1589  ASK=$0.15
SELL PUT  DEC-32.50  QSY-XZ  OI=1099  BID=$0.35
INITIAL NET-CREDIT TARGET=$0.25-$0.30
POTENTIAL PROFIT(max)=11% B/E=$32.25



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

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.

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

BIIB - Biogen Idec  $58.31  *** Stuck In A Trading Range? ***

Biogen Idec (NASDAQ:BIIB) is a biopharmaceutical company engaged
in the research, development, manufacture and commercialization
of targeted therapies for the treatment of cancer and autoimmune
and inflammatory diseases.  The firm's lead products are Avonex,
for the treatment of relapsing multiple sclerosis; Rituxan and
Zevalin, both of which treat B-cell non-Hodgkin's lymphomas; and
Amevive, for the treatment of adult patients with severe chronic
plaque psoriasis who are also candidates for systemic therapy or
phototherapy.  The company also receives revenues from royalties
on sales by its licensees of a number of products covered under
patents that it controls.

BIIB - Biogen Idec  $58.31

PLAY (conservative - bearish/credit spread):

BUY  CALL  DEC-70.00  IHD-LN  OI=1388  ASK=$0.20
SELL CALL  DEC-65.00  IHD-LM  OI=6461  BID=$0.65
INITIAL NET-CREDIT TARGET=$0.50-$0.55
POTENTIAL PROFIT(max)=11% B/E=$65.50


__________________________________________________________________

INSP - InfoSpace  $49.17  *** Consolidation Underway! ***

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

INSP - InfoSpace  $49.17

PLAY (very conservative - bearish/credit spread):

BUY  CALL  DEC-65.00  IOU-LM  OI=1100  ASK=$0.25
SELL CALL  DEC-60.00  IOU-LL  OI=423   BID=$0.55
INITIAL NET-CREDIT TARGET=$0.40-$0.45
POTENTIAL PROFIT(max)=8% B/E=$60.40



~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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 11/14/04
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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

SIMG     NOV    12.50   12.10   15.60    0.40   5.95%   3.31%
NCRX     NOV    25.00   24.30   27.85    0.70   5.52%   2.88%
ANF      NOV    32.50   32.10   44.68    0.40   2.78%   1.25%
STTX     NOV    25.00   24.60   27.40    0.40   3.89%   1.63%
SNDA     NOV    22.50   21.85   38.69    0.65   7.78%   2.97%
IDBE     NOV    12.50   12.15   18.58    0.35   6.44%   2.88%
BVF      NOV    17.50   17.05   17.10    0.05   0.60%   2.64%
USG      NOV    17.50   16.90   31.59    0.60   6.84%   3.55%
SNDA     NOV    25.00   24.50   38.69    0.50   5.67%   2.04%
WEBX     NOV    20.00   19.60   25.06    0.40   5.75%   2.04%
ENER     NOV    15.00   14.40   17.95    0.60   8.11%   4.17%
DRIV     NOV    25.00   24.35   38.70    0.65   6.81%   2.67%
PLMD     NOV    30.00   29.55   34.75    0.45   3.33%   1.52%
CNCT     NOV    22.50   22.10   29.92    0.40   4.68%   1.81%
CCBI     NOV    22.50   21.90   23.86    0.60   5.51%   2.74%
EYET     NOV    35.00   34.45   42.71    0.55   5.17%   1.60%
USG      NOV    17.50   17.15   31.59    0.35   6.12%   2.04%
RIGL     NOV    22.50   21.85   28.10    0.65   8.14%   2.97%
MCD      NOV    27.50   27.15   30.50    0.35   2.99%   1.29%
FARO     NOV    20.00   19.60   24.26    0.40   5.67%   2.04%
NOVN     NOV    20.00   19.60   22.80    0.40   4.88%   2.04%
VRSN     NOV    20.00   19.65   30.26    0.35   4.40%   1.78%
SSNC     NOV    20.00   19.55   22.99    0.45   5.71%   2.30%
CKFR     NOV    30.00   29.40   34.55    0.60   4.91%   2.04%
OSTK     NOV    35.00   34.60   60.20    0.40   4.10%   1.16%
GBBK     NOV    30.00   29.40   31.24    0.60   5.01%   2.04%
KRON     NOV    45.00   44.50   49.44    0.50   3.10%   1.12%
MRVL     NOV    23.75   23.35   30.80    0.40   5.59%   1.71%
AGIX     NOV    20.00   19.70   35.05    0.30   4.50%   1.52%
AFCO     NOV    20.00   19.55   23.22    0.45   6.68%   2.30%
TSRA     NOV    25.00   24.70   33.24    0.30   4.18%   1.21%
SRDX     NOV    25.00   24.50   29.52    0.50   5.79%   2.04%
ELN      NOV    22.50   22.05   30.01    0.45   6.53%   2.04%
XMSR     NOV    30.00   29.45   33.88    0.55   5.48%   1.87%
ENDP     NOV    20.00   19.55   21.73    0.45   6.72%   2.30%
LNG      NOV    20.00   19.45   44.35    0.55   8.61%   2.83%
USG      NOV    20.00   19.50   31.59    0.50   8.45%   2.56%
EDS      NOV    20.00   19.65   21.87    0.35   5.49%   1.78%
MANT     NOV    17.50   17.05   23.73    0.45   9.65%   2.64%
NTMD     NOV    17.50   17.25   19.73    0.25   6.12%   1.45%
A        NOV    22.50   22.10   22.58    0.40   5.86%   1.81%
SCHN     NOV    26.60   26.15   34.05    0.45   5.81%   1.72%
CYTC     NOV    25.00   24.60   26.98    0.40   5.27%   1.63%
USG      NOV    20.00   19.70   31.59    0.30   6.65%   1.52%
TSRA     NOV    22.50   22.30   33.24    0.20   5.12%   0.90%
FARO     NOV    22.50   22.10   24.26    0.40   7.61%   1.81%
NTAP     NOV    22.50   22.15   25.30    0.35   6.52%   1.58%
VAR      NOV    37.50   37.15   40.67    0.35   3.87%   0.94%
DOX      NOV    22.50   22.25   26.81    0.25   5.00%   1.12%
ROST     NOV    25.00   24.70   27.99    0.30   4.78%   1.21%
JNPR     NOV    25.00   24.70   28.50    0.30   4.89%   1.21%
LNG      NOV    22.50   22.15   44.35    0.35   8.04%   1.58%
SFNT     NOV    30.00   29.60   35.59    0.40   6.06%   1.35%
ELN      NOV    22.50   22.25   30.01    0.25   5.96%   1.12%
YHOO     NOV    35.00   34.60   37.80    0.40   5.30%   1.16%
XMSR     NOV    30.00   29.65   33.88    0.35   5.65%   1.18%
SHPGY    NOV    27.50   27.15   29.51    0.35   5.67%   1.29%
MRVL     NOV    25.00   24.65   30.80    0.35   7.34%   1.42%
ANF      NOV    35.00   34.55   44.68    0.45   6.35%   1.30%
USG      NOV    25.00   24.70   31.59    0.30   8.75%   1.21%
DDS      NOV    22.50   22.00   25.00    0.50  14.05%   2.27%
RDEN     NOV    22.50   22.25   25.00    0.25   7.08%   1.12%
USPI     NOV    35.00   34.60   37.76    0.40   7.21%   1.16%
RIGL     NOV    22.50   22.20   28.10    0.30   9.75%   1.35%
ELN      NOV    22.50   22.15   30.01    0.35  13.38%   1.58%
VTIV     NOV    17.50   17.00   19.40    0.50  17.33%   2.94%
NTMD     NOV    20.00   19.60   19.73    0.13   5.49%   2.04%
MYGN     DEC    17.50   17.05   19.71    0.45   5.52%   2.64%
VTIV     DEC    17.50   17.05   19.40    0.45   5.46%   2.64%
IFLO     DEC    15.00   14.55   18.99    0.45   6.89%   3.09%
SEAC     DEC    17.50   16.95   19.51    0.55   7.02%   3.24%
ADLR     DEC    12.50   12.10   14.13    0.40   6.88%   3.31%
UTHR     DEC    25.00   24.05   36.97    0.95   9.03%   3.95%
RIGL     DEC    20.00   19.70   28.10    0.30   4.02%   1.52%
NFLD     DEC    15.00   14.45   16.60    0.55   8.24%   3.81%
  
Although currently profitable, positions in Palomar Medical
(NASDAQ:PMTI) and Energy Conversion Devices (NASDAQ:ENER); at
$17.50, as well as Ditech Communications (NASDAQ:DITC) and
Telular (NASDAQ:WRLS) have previously been closed to limit
potential losses.  Nitromed (NASDAQ:NTMD) is among the most
obvious "early-exit" candidate in the portfolio.


NAKED CALLS

Stock   Strike  Strike  Break  Current   Gain    Max    Simple
Symbol  Month   Price   Even    Price   (Loss)  Yield   Yield

BRCM     NOV    35.00   35.35   29.33    0.35   4.44%   0.99%
LLTC     NOV    40.00   40.60   38.05    0.60   3.74%   1.48%
SINA     NOV    35.00   35.35   37.50   (2.15)  0.00%   0.99% *
IVX      NOV    20.00   20.75   14.92    0.75   9.51%   3.61%
PLMO     NOV    40.00   40.45   36.30    0.45   5.62%   1.11%
SLXP     NOV    20.00   20.65   17.94    0.65   8.83%   3.15%
AOC      NOV    25.00   25.25   20.66    0.25   3.93%   0.99%
CVH      NOV    50.00   50.60   47.48    0.60   4.46%   1.19%
DSPG     NOV    22.50   22.85   22.70    0.15   2.67%   1.53%
RNR      NOV    50.00   50.65   49.65    0.65   3.51%   1.28%
GIVN     NOV    40.00   40.45   29.94    0.45   5.86%   1.11%
ARW      NOV    25.00   25.40   24.50    0.40   5.82%   1.57%
TACT     NOV    30.00   30.50   22.00    0.50  10.16%   1.64%
NVTL     NOV    25.00   25.20   20.16    0.20   6.99%   0.79%
ASKJ     NOV    30.00   30.35   25.65    0.35   8.26%   1.15%
LSS      NOV    30.00   30.20   28.77    0.20   6.51%   0.66%
DITC     NOV    25.00   25.25   17.46    0.25   8.20%   0.99%
DISH     NOV    32.50   32.90   32.45    0.40   6.30%   1.22%
PTP      NOV    30.00   30.60   29.68    0.60  13.28%   1.96%
LEND     NOV    40.00   40.55   39.44    0.55   9.31%   1.36%
UVN      NOV    30.00   30.25   29.93    0.25   5.54%   0.83%
MNST     DEC    30.00   30.60   28.51    0.60   4.91%   1.96%
FOSL     DEC    30.00   30.50   28.21    0.50   4.16%   1.64%
SLAB     DEC    35.00   35.55   31.38    0.55   4.84%   1.55%

Positions in Americredit (NYSE:ACF), Cabot (NYSE:CBT), Ii-Vi 
(NASDAQ:IIVI), Lam Research (NASDAQ:LRCX), Hyperion Solutions
(NASDAQ:HYSL), UCI Inc. (NASDAQ:UICI), U.S. Steel (NYSE:X),
and United Surgical (NASDAQ:USPI) have previously been closed
to limit potential losses.  Sina Corp (NASDAQ:SINA) is an exit
candidate after Thursday bullish activity.  A number of issues
remain on the "watch" list for the last week of the November
options expiration.

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

RMBS   21.47  DEC 17.50  BNQ-XW 0.55 1207 16.95  32   3.1%  10.1%
NCRX   28.40  DEC 25.00  QNY-XE 0.75 14K+ 24.25  32   2.9%   8.2%
CECO   36.71  DEC 30.00  CUY-XF 0.70 2458 29.30  32   2.3%   7.7%
IFLO   19.26  DEC 17.50  QIF-XW 0.50   50 17.00  32   2.8%   7.4%
NTGR   15.98  DEC 15.00  TUD-XC 0.40  234 14.60  32   2.6%   6.5%
ENZ    18.64  DEC 17.50  ENZ-XW 0.45   62 17.05  32   2.5%   6.3%
CRA    13.56  DEC 12.50  CRA-XV 0.30  378 12.20  32   2.3%   6.1%
TSRA   38.64  DEC 30.00  TJQ-XF 0.35  459 29.65  32   1.1%   4.1%

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.
_________________________________________________________________

RMBS - Rambus  $21.47  *** Rally In Progress! ***

Rambus (NASDAQ:RMBS) creates a range of chip-to-chip interface
technologies that enhance the performance and cost-effectiveness
of its customers' semiconductor and system products.  The firm's
interface solutions can be grouped into two major categories,
memory interfaces and logic interfaces.  Memory interfaces
provide an interface between memory chips and logic chips.
Logic interface solutions provide an interface between two
logic chips.  These advanced chip-to-chip interface solutions
increase the data transfer rate between semiconductor chips,
improving performance and reducing systems costs.

RMBS - Rambus  $21.47

DEC 17.50 BNQ-XW LB=0.55 OI=1207 CB=16.95 DE=32 TY=3.1% MY=10.1%


_________________________________________________________________

NCRX - NeighborCare  $28.40  *** A Healthy Stock! ***

NeighborCare (NASDAQ:NCRX), formerly Genesis Health Ventures,
is a provider of institutional pharmacy services in the United
States.  The company provides pharmacy services for beds in
long-term care facilities in the U.S. and the District of
Columbia.  Its pharmacy operations consist of 62 institutional
pharmacies, 32 community-based professional retail pharmacies
and 20 on-site pharmacies, which are located in customers'
facilities and serve only customers of that facility.  In
addition, NeighborCare operates 16 home infusion, respiratory
and medical equipment distribution centers.

NCRX - NeighborCare  $28.40

DEC 25.00 QNY-XE LB=0.75 OI=14268 CB=24.25 DE=32 TY=2.9% MY=8.2%


_________________________________________________________________

CECO - Career Education  $36.71  *** On The Rebound! ***

Career Education (NASDAQ:CECO) is a provider of private,
for-profit, post-secondary education, with 82 campuses
throughout the United States, Canada, France, the United
Kingdom and the United Arab Emirates.  The company also
offers online education through its Online Education Group,
which includes American InterContinental University Online
and Colorado Technical University Online.  The company's
schools offer degree and diploma programs within its core
curricula of business studies, culinary arts, information
technology, visual communication and health education.

CECO - Career Education  $36.71

DEC 30.00 CUY-XF LB=0.70 OI=2458 CB=29.30 DE=32 TY=2.3% MY=7.7%


_________________________________________________________________

IFLO - I-Flow  $19.26  *** The Rally Continues! ***

I-Flow (NASDAQ:IFLO) manufactures a line of compact, portable
infusion pumps, catheters and pain kits that inject medication
directly to the wound site, and administer local anesthetics,
chemotherapies, antibiotics, diagnostic agents, nutritional
supplements and other medications.  I-Flow sells and ships its
products throughout the United States, Canada, Europe, Asia,
Mexico, Brazil, Australia, New Zealand and the Middle East.
Through InfuSystem, a wholly owned subsidiary, I-Flow is also
engaged in the rental of infusion pumps on a month-to-month
basis for the treatment of cancer.

IFLO - I-Flow  $19.26

DEC 17.50 QIF-XW LB=0.50 OI=50 CB=17.00 DE=32 TY=2.8% MY=7.4%


_________________________________________________________________

NTGR - Netgear  $15.98  *** Entry Point?  ***

NetGear (NASDAQ:NTGR) designs, develops and markets branded
networking products that address the specific needs of small
business and home users.  The firm supplies products that
meet the ease-of-use, quality, reliability, performance and
affordability requirements of these users.  Its diverse suite
of approximately 100 products enables users to share Internet
access, peripherals, files, digital multimedia content and
applications among multiple personal computers and popular
Internet-enabled devices.

NTGR - Netgear  $15.98

DEC 15.00 TUD-XC LB=0.40 OI=234 CB=14.60 DE=32 TY=2.6% MY=6.5%


_________________________________________________________________

ENZ - Enzo Biochem  $18.64  *** Technicals Only! ***

Enzo Biochem (NYSE:ENZ) is a life sciences and biotechnology
company focused on harnessing genetic processes to develop
research tools, diagnostics and therapeutics.  Enzo provides
diagnostic services to the medical community and has focused
on developing technologies for detecting and identifying genes
and for modifying gene expression.  These technologies are
generally applicable to the diagnosis of infectious and other
diseases, and form the basis for a diverse portfolio of over
300 products marketed to the biomedical and pharmaceutical
research markets.

ENZ - Enzo Biochem  $18.64

DEC 17.50 ENZ-XW LB=0.45 OI=62 CB=17.05 DE=32 TY=2.5% MY=6.3%


_________________________________________________________________

CRA - Celera Genomics  $13.56  *** Bottom-Fishing! ***

Celera Genomics (NYSE:CRA) is a business is engaged in the
discovery and development of targeted therapeutics for cancer,
autoimmune, and inflammatory diseases.  The firm is leveraging
its proteomic, bioinformatic, and genomic capabilities to
identify and validate existing drug targets, and to discover
and develop small molecule therapeutics.  The company expects
to use these capabilities, along with its molecular and cell
biology, medicinal and computational chemistry, pharmacology,
and other drug development technologies to optimize the potency,
selectivity, and physical properties of new drug candidates.

CRA - Celera Genomics  $13.56

DEC 12.50 CRA-XV LB=0.30 OI=378 CB=12.20 DE=32 TY=2.3% MY=6.1%


_________________________________________________________________

TSRA - Tessera Technologies  $38.64  *** New All-Time High! ***

Tessera Technologies develops semiconductor-packaging technology
that meets the ongoing demand for miniaturization and increased
performance of electronic products.  It licenses its technology
to customers, enabling them to produce semiconductors that are
smaller and faster and incorporate more features.  These chips
are utilized in electronics products, including digital cameras,
MP3 players, personal computers, personal digital assistants,
video game consoles and wireless phones.  The firm's technology
enables multiple semiconductors to be stacked vertically in a
single three-dimensional, multi-chip package that occupies almost
the same circuit board area as a chip-scale package.

TSRA - Tessera Technologies  $38.64

DEC 30.00 TJQ-XF LB=0.35 OI=459 CB=29.65 DE=32 TY=1.1% MY=4.1% TS



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

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.

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

BOBJ - Business Objects  $22.13  *** Profit-Taking Continues! ***

Business Objects S.A. (NASDAQ:BOBJ) develops, sells and supports
business intelligence software for client/server environments,
intranets, extranets and the Internet.  The three main markets
for BI are enterprise, extranet and analytic applications.  For
enterprise, Business Objects products provide employees with
information to make better business decisions.  Deployments can
range from small workgroups to enterprise deployments.  Extranet
products allow organizations to build stronger relationships by
linking customers, partners and suppliers via the world-wide web,
and for analytic applications, products offer packaged practice
analytics, alerts driven by business rules and workflow for
specific business users.

BOBJ - Business Objects  $22.13

PLAY (sell naked call):

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

SELL CALL  DEC 25    BBQ-LE    365    0.40  25.40   6.0%   1.6%


_________________________________________________________________

ENZN - Enzon Pharmaceuticals  $14.86  *** Speculation Only! ***
 
Enzon Pharmaceuticals (NASDAQ:ENZN) is a biopharmaceutical firm
that is focused on the discovery, development, manufacture and
commercialization of pharmaceutical products in three areas of
therapeutic focus: oncology and haematology; transplantation,
and infectious disease.  Enzon has developed or acquired four
human therapeutic products that are marketed by the company:
ABELCET (amphotericin B lipid complex injection), ONCASPAR
(pegaspargase), ADAGEN (pegademase bovine injection), and
DEPOCYT (cytarabine liposome injection).

ENZN - Enzon Pharmaceuticals  $14.86

"SPECULATIVE" PLAY (sell naked call):

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

SELL CALL  DEC 20    QYZ-LD    187    0.55  20.55  14.8%   2.7%


_________________________________________________________________

TACT - TransAct Technologies  $20.36  *** Next Leg Down? ***

TransAct Technologies (NASDAQ:TACT) designs, develops, makes
and markets transaction-based printers under the Ithaca and
Magnetec brand names.  In addition, the firm markets related
consumables, spare parts and service.  Its printers are used
worldwide to provide transaction records, such as receipts,
tickets, coupons, register journals and other documents.  The
company focuses on two markets: point-of-sale and banking and
gaming and lottery.  TransAct offers an array of products
utilizing inkjet, thermal and impact printing technology for
applications requiring up to 60 character columns.

TACT - TransAct Technologies  $20.36

PLAY (sell naked call):

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

SELL CALL  DEC 25    TUF-LE    452    0.40  25.40   8.5%   1.6%



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

SEE DISCLAIMER - SECTION 1

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

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

Get your FREE weekly charts of the NASDAQ!

Hot Stix’ stock market report reveals simple, powerful strategies 
for profiting from the QQQ - whether down or up!

http://www.hotstix.com/public/weekly.asp?aid=755

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


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

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


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

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

Contact Support




DISCLAIMER

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

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

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

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives