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Daily Newsletter, Saturday, 11/08/2008

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Table of Contents

  1. Market Wrap
  2. Index Wrap
  3. New Option Plays
  4. In Play Updates and Reviews

Market Wrap

Blame It On the VTI

The elections are over and the president elect is holding meetings and press conferences. Unfortunately they failed to divert the attention of traders away from the horrible economics and the Dow fell over 1000 points from its Tuesday high. At least that is what the media would have you believe.

Market Statistics
[Image 1]

The biggest economic report of the month, the non-Farm payrolls, was released on Friday and it was not pretty. The U.S. economy lost -240,000 jobs in October but that was not the worst news in the report. There was a sharp downward revision to the two prior months. The September job losses of -159,000 were revised lower to a loss of -284,000 jobs and the August loss of -73,000 was revised lower to -127,000. This was the 10th consecutive month of job losses totaling -1.2 million jobs. Half of that decline came in just the last three months. The unemployment rate spiked +0.4 to 6.5% and higher than the levels hit in the last recession. That is a 14-year high.

The job losses are expected to get larger before this cycle is over. The economy is in a negative feedback loop where job losses and fear of losing your job is slowing spending significantly. As spending slows more jobs are lost. We are also expecting a horrible holiday shopping season and further major layoffs in the financial sector. Some analysts are expecting unemployment to rise as high as 8% before we hit bottom.

However, the October job losses were not as large as many traders expected. The estimates two weeks ago were for a loss of 179K. That escalated to 200K by last weekend but by Friday many whisper numbers were over 300K. When the jobs number showed a loss of only 240K a collective sigh of relief was heard in the market and we saw a short covering spike at the open.

Non-Farm Payroll Chart
[Image 2]

The Pending Home Sales Index for September declined 4.2 points to 89.2 after a sharp spike of +6.5 points in August. The major problem was the evaporation of financing opportunities. With foreclosures continuing and financing very hard to get analysts believe home sales will decline over the next several months. This is not unusual even in normal times because homebuyers tend not to shop over the holidays. Buyer traffic will begin to pickup again in February and the bank rescue packages will have had time to be implemented and hopefully financing will be available by spring. Greenspan said at a Friday appearance that home prices should rebound in the first half of 2009.

Next week's economic calendar is fairly bland. The Business Inventories, Retail Sales and Consumer Sentiment are the only material events that might interest traders. On Saturday the G20 will convene in Washington and that could produce some market stimulating news. The G20 is likely to come to grips over a coordinated effort to solve the banking crisis and that could involve some currency intervention. This could produce some serious volatility for Monday Nov-17th.

Saturday is also the deadline for giving notice if you want to withdraw money from hedge funds on Dec-31st. This does not mean Monday will be a big selling day but this is another hurdle the hedge funds will have to cross. Analysts claim the majority of hedge funds have deleveraged and are now net long the market on a level basis. They are sitting on $600-$680 billion in cash and waiting on the Nov-15th notice deadline before putting that cash back to work. If the market would develop a positive trend most of those funds would leverage up again using that $600 billion in cash. Having just been burned they probably would not jump right back in the 8:1 or 10:1 leverage they had before but even 3:1 or 4:1 would be a strong boost for the market. If withdrawals received by the 15th are negligible then I believe we can expect a more bullish outlook for the next couple weeks. Obviously if they are deluged with withdrawals then impact to the markets would continue to be negative.

Economic Calendar
[Image 3]

GM was a news headliner after reporting a $4.2 billion loss for Q3. After one time items that loss was only $2.5 billion on an operating basis but it was still ugly. GM is burning cash at the rate of $2.3 billion per month and they only have $16.2 billion in liquidity. At the current rate they would run out of money in less than eight months. GM is trying to raise additional capital by selling non-core assets like the Hummer division, a plant in France and its ACDelco parts business. It is also trying to trim $10 billion in additional costs and is hoping to get some help from the government. GM warned it had to maintain $11-$14 billion on hand to pay suppliers and handle the float of day-to-day operations. If GM is burning $2.3 billion a month, has $16.2 billion in cash and needs to maintain $11-$14 billion for operations then their life expectancy without a lifeline from the government is measured in weeks, not months. GM bonds are trading at 25 cents on the dollar with a yield of 33.45% assuming they don't default. Auto sales fell to an annualized 10.5 million units in October and the lowest level since Feb-1983. The pace of sales in 2007 peaked at 16.6 million units. Carmakers need an industry pace over 15 million units to remain profitable due to the enormous overhead required to maintain plants, employees and a steady stream of parts and designs. GM saw a -45% drop in sales compared to the same period in 2007. Overall industry sales are down -34% for the same period. Auto dealers are seeing sales constrained due to a lack of financing. Only a very few people have the credit needed to buy a car in today's gridlocked credit markets. S&P cut it's rating on GM to CCC+ with a negative outlook. They also affirmed ratings for Ford at B- despite the Q3 loss and $7.7 billion cash burn for the quarter. Ford has more cash than GM at present and only reported a $129 million loss for Q3.

GM Chart
[Image 4]

Greenspan spoke at a luncheon meeting on Friday and said Q4 GDP was going to be ugly. He said there was no doubt the U.S. and world economy was in a very severe depression and U.S. GDP will decline significantly in Q4. Greenspan said early data for October shows the Q4 GDP falling at more than a 3% rate. "It's important to recognize we are not quite in a free fall but something close to it," Greenspan said. "This economy, and indeed the world economy, has tilted over and is moving down fairly aggressively, pretty much across the board." Greenspan described this as a once-in-a-century event. After 18.5 years as Fed Chairman it appears Greenspan is having trouble staying out of the limelight and needs these monthly sound bites to keep up his book sales.

On a positive note Nvidia (NVDA) gained +14% after posting earnings, which were nearly inline with the estimates and gave a rosy forecast. Nvidia reported earnings of 11 cents after charges compared to estimates of 12 cents without charges but that was not the reason for Nvidia's gain. Nvidia said they expect sales to decline only -5% in Q4. Given the decline in PC sales overall and predictions by their competitors this is very positive. Nvidia is breaking into new markets and just started making video chips for notebooks using an Intel chipset. In a chip market full of bad news Nvidia is standing apart from the crowd.

The current recession is killing Las Vegas as fewer people are finding extra money to donate to the casinos. Las Vegas Sands (LVS) fell -33% on Thursday and another 11% on Friday as bankruptcy rumors swirled. LVS said on Thursday it would likely default on its debt covenants in Q4 as a result of lower traffic. Analysts immediately started thinking this could lead to a bankruptcy by the Sands. The problem is the debt covenants, which prevent them from having a debt to equity ratio above a certain level. Banks normally put these in the loan provisions to prevent the borrower from becoming over committed and unable to pay their debts. LVS stock closed at $6.76 on Friday after trading at over $140 just a year ago. Billionaire Sheldon Adelson controls almost two-thirds of the stock and has lost billions in the decline. Bankers are hoping they will put up some more capital to resolve the problem. The entire casino industry has been aggressively expanding using huge loans to build multi billion dollar properties. When those loans dried up they were forced to use more of their cash flow to keep things moving. When gamblers quit showing up and those who did spent less money it caused a serious cash flow squeeze on the entire sector. Since the casino business is very lucrative in normal times this may be a buying opportunity once the smoke clears and we see who is going to survive. The market cap of LVS stood at only $2.5 billion at Friday's close and that is chump change for the type of people active behind the scenes in the casino sector. Other names in the sector are MGM, WYNN, BYD and PENN. Harrah's, old symbol HET, was bought out and taken private in late 2007 by Apollo Management and TPG Capital. Harrah's was taken out right at the top of the market and they are suffering under $24.2 billion in debt and the cancellation of a $2.9 billion credit line. I would bet there are some interesting discussions going on behind those closed doors.

Wells Fargo (WFC) announced an $11 billion stock offering late Thursday at $27 per share for sale to the public. This was 15% lower than the closing price on Wednesday. The stock dropped to $27.05 on Friday morning before rebounding back to $29. The offering is expected to close next Thursday. The proceeds of the offering are going to complete the $15 billion acquisition of Wachovia (WB). WFC already received $25 billion from the government under the TARP program. WFC is going to take a $60 billion write down of Wachovia loans, $39 billion of that when the deal closes. That allows them to take a substantial tax credit and reduces the exposure to the mortgage portfolio in the future. Wells should be positioned after the deal as a member of the trillion dollar club of large banks and have a tangible common equity to assets ratio second only to Citigroup. They will also have become a member of the "too big to fail" club. I believe that once the smoke clears on the financial sector WFC will be a leader out of the darkness. Bottom fishers should be careful here and I would rather buy a breakout over $35 than take a risk here at $28. There are still too many unknowns until after the Wachovia deal closes. If they had to go back to the government for more money to complete the deal there could be a dilution risk.

Oil prices soared to $71.77 on Tuesday and then plunged back to $59.97 on Friday. Obviously the recent volatility has not ended. There are projections by some analysts for a continued drop back to $50. I am not in that camp. I believe it is possible we could see $55 but the range from $55-$60 is very strong support and a level I expect to hold. One reason is the average marginal cost of a new barrel of oil is over $65 per barrel. Oil companies are not going to pump new oil for a loss. They will do the same thing gas producers have been doing and that is curtail production until prices go back up. This is the same thing OPEC is doing and continued news reports suggest OPEC members are really cutting production this time around and we will see the impact on prices over the next 60 days. Also, the much heralded IEA World Oil Report is due out on Wednesday and the early news releases claim it will be much more bearish on the production outlook than in prior years. Reportedly they are going to say that prices will return to $100 very quickly. I am bullish on oil here.

December Crude Chart
[Image 13]

I was out of town on business on Wed/Thr and did not watch the markets other than logging into get the closing print late in the evenings. With no idea what had transpired in the news you have to move into a forensic investigation to try and find the clues. First I looked at the internals. Volume was strong but not exceptionally so it did not look like a panic sell off. On both Wed/Thr the volume imbalance was huge at better than 10:1 in favor of declining volume both days. I looked at a couple hundred charts of high profile stocks and they all looked the same. All had a straight drop from Wednesday morning until early afternoon on Thursday. After doing the research I believe the evidence was clear. It was program driven liquidation by fund(s).

I don't know if it was hedge funds or stock funds or both but I have no doubt it was program driven. It was also index based. They sold the various indexes, futures and or ETFs covering very large baskets of stocks. Because of the very large breadth of the declining stocks with every sector seeing the same basic decline I checked the Vanguard Total Market ETF, the VTI. (When investors buy a large number of shares of an ETF over the amount that is normally traded the "Authorized Participant" or market maker for that ETF has to buy/borrow a corresponding number of shares of the underlying stocks/futures to produce a creation unit consisting of a new block of ETF shares. This is typically done in 10,000 to 50,000 share blocks. When there is a large imbalance on the sell side the market maker will have to redeem that creation unit and sell the same stocks that make up the ETF. This is done to keep the net asset value of the ETF in line with the actual stock prices. In practice this is done by computer and occurs almost instantly.) The creation unit for the VTI is 50,000 shares. For a market maker to create 50,000 new VTI shares he must deliver to Vanguard shares of each individual stock in the "Portfolio Composition File" in the quantities listed. There are 1664 stocks in the VTI PCF today. The graphic below is just the first 14 stocks in the creation unit. Basically every time a market maker creates or redeems a 50,000-share creation unit he has to either buy and supply shares of all 1664 stocks to Vanguard or redeem and sell shares in those same 1664 stocks. The value of those shares in all 1664 stocks was approximately $2.5 million per creation unit last week.

VTI Holdings Table Page One
[Image 10]

The average daily volume on the VTI over the last 12 months is about 3.2 million shares. On Wednesday nearly 23 million shares were traded and another 21.5 million on Thursday with over 90% down volume. This was record volume for the ETF and nearly three times the volume leading into the Oct-10th bottom. (For every million shares the market maker had to eat he had to redeem/sell 20 of the creation units described above at $2.5 million in underlying stock for each.) In the chart below you can clearly see the average volume leading up to the October decline was minimal. We saw a slight jump in volume around Oct 10th but still nothing major. Then, as we headed into the October 31st year-end for mutual funds the volume rose to a peak of 19 million and six times the average on exactly Oct 31st. This was clear evidence of a fund or funds capitalizing on the year-end window dressing using the VTI.

On Mon/Tue volume dropped sharply as the fund(s) waited for the election results. When the market opened up on Wednesday and then failed they started selling and did not stop until 1:PM on Thursday. On Friday we saw the same thing with a large volume of five million shares sold after Obama's press conference ended. It appeared they were still looking for the Obama bounce they didn't get on Wednesday. The volume patterns of the VTI over the last week clearly show it was not a market sell off. It was a fund or funds dumping the VTI ETFs they had accumulated going into the October 31st fund year-end. This was NOT a market event where millions of investors dumped stocks because Obama won the election. If you compare the volume for the same period on the QQQQ you will see exactly the opposite evidence. Even with the Cisco earnings volume was much lower than the prior four weeks with no spike on Wed/Thr. If it were a broad market event where millions of traders dumped stocks the QQQQ would have shown a corresponding jump in volume. Even the S&P-500 ETF, the SPY, showed only a minimal increase in volume for those two days.

Conspiracy theorists could make a convincing case that somebody wanted to make it look like Obama's election killed the market. I prefer to think that a major hedge fund was playing the year-end window dressing and hoping for a major market spike on election results and bailed when that spike did not occur. It would have taken less than $500 million in margin to accumulate enough VTI shares to produce the event we saw. Had we seen a major rally occur on the election results it could have been a very profitable play. With hedge funds sitting on $600 billion in cash today the odds are good somebody was rolling the dice on the election results. I doubt the selling in the VTI was the only security being sold but I could not find any corresponding track on any other index/ETF. I am sure there were plenty of sell stops hit by the decline since the prior week's rally was weak at best. The severity of the selling and the 10:1 down volume suggests there was more than one selling vehicle. I checked the volume on the various futures contracts but they traded less than on Monday or Friday. If you know of any irregular trading patterns on those day let me know and I will pass it on to all the readers.

Vanguard Wilshire 5000 ETF - VTI Chart
[Image 5]
Nasdaq QQQQ Chart
[Image 6]
S&P-500 SPY ETF Chart
[Image 14]

If you agree with my analysis the market crash last week was caused by program selling by hedge funds on an election bet gone bad then the next conclusion should be that the market is not as weak as it appeared. I am sure the drop scared many traders who had just turned bullish the week before but a couple days of gains should bring those recent converts back into the corral. I read a lot of commentary this weekend suggesting we are going to retest the lows. The bears are adamant we are going back to 7400 on the Dow. I wrote last Tuesday night I was skeptical of the rally but I was long. We saw in the description above how buying the VTI shares helped push the indexes higher in the closing days of October so in reality the gains were as artificial as this week's selling. So where does that leave us?

I think there are some pretty smart people out there and I bet many of the fund managers saw the same thing I did. I would like to think the positive news on the bailout front and a potential bailout to GM that could happen any day would be motivation to continue buying the market. We knew the jobs number was going to be bad. We knew the GDP was going to be negative. I think all the bad news is baked into the cake. Obama said another stimulus package would be his first priority after his inauguration if the current batch of lawmakers did not act on it sooner. Countries around the world are cutting rates on almost a daily basis. The election is behind us and the world seems happy with our choice. Countries are proclaiming national holidays in honor of Obama. Antigua and Barbuda are going to rename their highest mountain as Mount Obama in his honor. Obama himself appears to be turning away from his announced tax hikes as prospective cabinet members have helped him to see the light. Wall Street should be celebrating rather than selling. We have entered the best six months of the year cycle and oil prices are at an 18-month low. Most analysts claim markets bottom 6-9 months before the recession ends. With expectations for a new growth cycle to begin in Q2 or possibly early Q3 of next year this is the time for the market to bottom. I could go on but you get the picture. I am not seeing a credible rally yet but I believe it is close. Next week is going to be the key. Whatever direction the market picks next week in the absence of election news, very little material economic news and almost nothing on the earnings calendar is going to likely be the real deal.

The Dow returned to 8700 on Thursday and found support after the two day beating for -900 points. On Friday that support rose to 8800 and the Dow closed at the high of the day. Technically it is stuck in the middle of a huge range from 8150 to 9600. I can't really point to anything on the Dow chart to support a bullish outlook. The two-day sell off knocked the Dow back into congestion and we just need to wait for a new direction to appear. Hard support is 8200 and hard resistance at 9600.

Dow Chart
[Image 7]

The S&P-500 looks just like the Dow only the support and resistance lines are a little more pronounced. Resistance at 1010 held solid last week. The sell off knocked us back below 985, which was interim resistance in late October. I don't believe it is relative after last week's move higher.

S&P-500 Chart
[Image 8]

The Nasdaq is laboring under a heavy load. Continued drops in guidance by tech companies had already soured sentiment but it was inching higher until Wednesday. It has yet to really attempt a breakout over 1800 but did manage to string six consecutive days of gains together just before Wednesday's decline. With Apple trading under $100 and RIMM under $50 and Google looking like a short at $330 I am surprised it managed those six days of gains. Looking at the Nasdaq chart does not inspire any confidence in a future rally until we see a move over 1800.

Nasdaq Chart
[Image 9]

I pointed out on Tuesday that the Russell gains had stalled at resistance at 550 and it appeared fund managers were waiting for the election results to determine their small cap plans. The two-day sell off knocked it back to 500 where it held for two days. This has been weak support in the middle of its recent range but I am not convinced it will hold. If it does hold this would be a higher low and a decent launch point for another attack on 550. As I have stated many times the Russell is a sentiment gauge for fund managers. If they believe the market is going higher and the risk of another crash is low they will favor the small cap stocks over the blue chips. A little money going into a low volume stock can make a lot of difference where a lot of money moving into a high volume stock can go unnoticed. Fund managers have to be making plans for investments now that will reap rewards and generate bonuses in 2009. This greed factor will make them move back into small caps as soon as they think the bottom is behind us.

Russell 2000 Chart
[Image 11]

Thomson financial put out the following data on Friday. In years where there were net job losses for the entire year the following year was very profitable for the markets. Since 1950 only one year with net job losses failed to be followed by a stronger market. That year was 2001 and we all know why that year was different. We are on track to lose more than 1.5 million jobs in 2008 making it the third worst year since 1950. Hopefully the historical trend is still with us.

Gains from Net Job Loss Years
[Image 12]

I am still long the broad market but even more skeptical than last week. I want to believe the scenario I outlined above but that view through the keyhole may not be the entire picture. I think we are at the point where we have to take a chance that the next move will be higher. The cycle is right, the bad news is priced in and there are changes on the horizon. I think we need to be long but with decent stops. If stopped we need to buy support at the prior lows and try again. The majority of bull market gains are made in the first two weeks of a real rally. Those of us long from late October have our fingers crossed that everyone else joins us only at a higher level.

Jim Brown


Index Wrap

OOPS, NOT SO FAST OR FAR!

THE BOTTOM LINE:

On schedule, the market topped out a few days after hitting an overbought-high bullish extreme on my sentiment indicator and within the post 1-5 day window for reversals. Moreover, highs in the major indexes this past Tues-Wed now defines down trendlines and technical resistance; or, helps define where an upside breakout might be seen.

Only the S&P 100 (OEX)and Dow 30 (INDU) retraced even a minimal 38% fibonacci retracement of the last big downswing. OEX hit the retracement within a few points (483 versus 477) and INDU overshot this initial percent retracement a bit, but then hit resistance implied by the aforementioned down trendline.

The recent sell off doesn't necessarily suggest to me that the major indexes will break below their prior lows. From a trading perspective, you need to be nimble on outright buys of calls or puts. It's going to be important to take profits after minimal upside objectives are achieved.

If you bought calls down near the lows and there were signs of bottoming action (e.g., in the 410 area in OEX or around 8175 in INDU) to suggest such a trade, it was important to take profits after rallies got to or near the first key (38%) retracement levels; and/or, after it became clear that the market was hitting trendline resistance. You don't get long to decide on trades.

I suspect we'll see more sideways action, perhaps where prices work back down toward the prior lows. Near-term, after a sharp decline in bullish sentiment (see the OEX chart), the indices may rally some. One chart/technical aspect I'll be watching is whether the major indexes can get back above their 21-day moving averages, such as the Dow almost did on its Friday close.



MAJOR STOCK INDEX TECHNICAL COMMENTARIES

S&P 500 (SPX); DAILY CHART: The S&P 500 (SPX) chart remains bearish in its pattern as the highs brought more points and better definition to a September-November down trendline, as highlighted on the SPX daily chart below.

I wrote last week that the key resistance would be at between 985 and the 1000-1020 price zone. You may have felt that the 1000 area would be a key area also and it was. So, key initial resistance (at 1000-1020) comes into even better focus. Next resistance is 1044-1050.

Initial support developed in the 900 area; I thought it would be 925, then 850. The 850 area is still important but 900 is a near pivotal support, again proving the relative importance at times of those round-100 levels in SPX.

[Image 1]



S&P 100 (OEX) INDEX; DAILY CHART

The chart pattern for the S&P 100 (OEX) remains quite similar to that of the 500 in all its bearish aspects.

Very near-term resistance at 450 is implied by the recently penetrated 21-day moving average. Key trendline and retracement resistance in OEX remains as the 480 area, with next important resistance at 495-505.

OEX broke under what I suggested last week as initial support around 445, but the index managed to hold this level by the end of this past week. Support is at 430, then 410, with fairly major support at 400.

[Image 2]

SENTIMENT: Not surprisingly, Friday's rally set up after the oversold-extreme bearishness suggested by the Thursday reading in my call to put volume ratio for CBOE equities' options as seen above. I don't anticipate that the sharp retreat in bullish conviction means that there will be another sustained advance but the 21-day moving average and possibly also, down trendline resistance, could get challenged.



DOW 30 (INDU) AVERAGE; DAILY CHART:

The Dow 30 Average (INDU) has recently had a rally failure that's below the prior upswing, keeping its bearish chart pattern intact. Key near resistance now is at 9500 and then in the 9800 to 10000 price zone; I assume that 10000 is going to be very tough resistance for some time.

Near support has to be assumed at the prior low around 8600, with next technical and even more pivotal support at the line of prior lows around 8175.

I noted last week that I'd favor buying puts on a further rally but didn't say where. As far as chart resistance implied by the down trendline, it took until the Tues-Wed highs formed to draw it with some confidence. I suggested already an exit on calls when INDU hit 9400.

[Image 3]



NASDAQ COMPOSITE (COMP) INDEX, DAILY CHART:

The Nasdaq Composite Index (COMP) rally failed this past week not far over the prior line or cluster of prior highs at 1782. Key resistance is at 1782-1796; judging by the down trendline, first resistance looks to be in the 1705 near-term. Major resistance begins around 1870 and extends to 1900, the low end of the downside price gap from early-October.

Initial COMP support has moved from the 1650 area to 1600 even. Major support in the Composite begins at 1500-1495.

[Image 4]



NASDAQ 100 (NDX) DAILY CHART:

The recent rally in the Nasdaq 100 (NDX) failed very close to prior resistance in the 1380 area as seen on the chart. Tough technical resistance then comes at 1470 area, extending to 1500.

Support was seen on the recent decline to the 1240 area. I've noted next support at 1170, at a cluster of prior hourly and daily lows.

The Nasdaq stocks have fallen out of favor and I'd wait for further basing type action in NDX to initiate bullish trades even for a short-term pop. I favor buying puts if NDX manages to get back up to the 1470 area. Best upside potential I see currently is for the index to retrace around half of its August-October decline or to around 1550-1565.

Worst downside case is significantly lower, even below 1000, based on the long-term chart (not shown) considerations.

[Image 5]



NASDAQ 100 TRACKING STOCK (QQQQ); DAILY CHART:

Near resistance in QQQQ is in the 34 area, with even tougher resistance at 36.0.

Near technical support is at 30.2-30.0, with potentially stronger support at 28.0. Buying the stock in the 28 area, if seen, may be a fairly low risk trade, assuming the use of a stop at 27.0.

Shorting QQQQ at 38 also looks to be a low risk trade assuming a buy stop at 38.6. I'd also note that right now potential to above 36, a 38% retracement of the last major downswing, seems iffy.

[Image 6]



RUSSELL 2000 (RUT); DAILY CHART:

The Russell 2000 (RUT) chart remains bearish. Resistance is apparent in the 550 area, then around 580-585.

Support begins at 470 and extends to the 440 area.

The likely outlook looks to be for a trading range, between 580-600 on the upside at a maximum and 450, perhaps to as low as 400, on the downside.

[Image 7]



GOOD TRADING SUCCESS!



NOTES ON MY TRADING GUIDELINES AND SUGGESTIONS

CHART MARKINGS:

1. Technical support/areas of likely buying interest are highlighted with green up arrows. 2. Resistance/areas of likely selling interest: red down arrows. [Gray up/down arrows: support/resistance levels that got pierced]

I WRITE ABOUT:

3. Index price areas where I have a bullish bias or interest in buying index calls, selling puts or other bullish strategies.

4. Price levels where I suggest buying index puts or adopting other bearish option strategies.

5. Bullish or Bearish trader sentiment and display the graph of a CBOE daily call to put volume ratio for equities only (CPRATIO) with the S&P 100 (OEX) chart. However, this indicator pertains to the market as a whole, not just OEX. I divide calls BY puts rather than the reverse (the put/call ratio). In my indicator a LOW reading is bearish and a HIGH reading bearish, consistent with other overbought/oversold indicators.

Trading suggestions are based on Index levels, not a specific option (month and strike price) and entry price for that option. My outlook often focuses on the intermediate-term trend (next few weeks) rather than the next several days of the short-term trend.

Having at least 3-4 weeks to expiration tends to be my guideline for trade entry choice. I attempt to pick only what I consider to be 'high-potential' trades; e.g., a defined risk point would equal in points only 1/3 or less of the index price target.

I favor At The Money (ATM), In The Money (ITM) or only slightly Out of The Money (OTM) strike prices so that premium levels are not as cheap as would otherwise be the case, which helps in not overtrading an account. Exit or stop points, as well as projected profitable index price targets, are based on my technical analysis of the underlying indexes.


New Option Plays

New calls in education, transports, oil and more. Plus, a strangle.

Play Editor's Note: We are adding a bunch of new candidates to the newsletter this evening. However, I want to point out the charts in Jim's weekend market wrap. The specific charts that show the huge range for the DJIA and the S&P 500 and we're stuck right in the middle.

If you are feeling the least bit hesitant to jump back into the markets I want to say, "it's okay." You don't have to. More conservative traders should probably NOT open new positions at this time. A better entry point would be on a bounce from the bottom of the range or a breakout through the top of the range if you're bullish, just the opposite if you're bearish.

I also wanted to add a few notes on some stocks I'm watching.

GD might be a buy here with the mini-double bounce from the $60.00 mark. Use a tight stop under $60.00.

GOOG looks bearish here. It remains stuck in its long-term down trend and the last couple of sessions look like a breakdown from its consolidation pattern. I would consider puts with a stop loss around $342.50, maybe a stop above $350. It depends on how much risk you can handle and if you're trading GOOG you need to handle a lot. Actually, a better play instead of just buying puts and aiming for a drop could be selling calls. Volatility is still historically high. I wouldn't sell naked calls on it but a credit spread might work. November options expire in two weeks. You could sell the November $330 puts for about $18.00-20.00. Then it's up to you to pick how much risk you want and buy a higher-price put to complete your spread.

FLR got some action on Friday as investors speculate on the new administration building a bunch of roads. A rise over $44.00 or $45.00 might be a bullish entry point.

TAP is showing some strength. A breakout over its simple 50-dma or a dip back toward $40.00 might be an entry point to buy calls.

LFC might be worth watching. A rise over last week's high near $42.65 could be an entry point for calls.

Now, just a reminder with all of our suggested plays below...It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.


New Option Plays
Call Options Plays
Put Options Plays
Strangle Options Plays
APOL None GLD
BDX    
BG    
CMP    
ESI    
FDX    
HES    

NEW DIRECTIONAL CALL PLAYS


Apollo Group Inc. - APOL - close: 69.61 change: +2.71 stop: 66.45

Why We Like It:
The late October spike in shares of APOL was investor reaction to a better than expected earnings report and management comments about revenue growth for 2009. The stock has been relatively stable the last few days and failed to see any serious sell-off during the market's recent weakness. The stock looks poised to breakout over resistance near $70.00, which should set it on a course for a rally to the next level of resistance near $80.00.

We are suggesting readers buy calls at $70.55. If triggered our target is the $79.90 mark as APOL has resistance in the $80-81 zone. The Point & Figure chart is bullish with an $80 target.

FYI: APOL is not the only education stock on the letter tonight. We're also adding ESI. You may want to limit your exposure to the sector to just one stock.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 70.00 OAQ-LN open interest=2774 current ask $5.30
BUY CALL DEC 75.00 OAQ-LO open interest= 441 current ask $3.00
BUY CALL DEC 80.00 OAQ-LP open interest= 486 current ask $1.50

Annotated Chart:
APOL

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           10/28/08 (confirmed)
Average Daily Volume =       4.0 million  


Becton, Dickinson & Co. - BDX - close: 70.73 change: +2.36 stop: 67.45

Why We Like It:
BDX is a medical device company. It looks like shares have finally reversed their bearish trend. The stock recovered very quickly last Wednesday thanks to investor reaction to its earnings report. Thursday's decline did not break the 10-dma and Friday saw BDX challenging short-term resistance again.

We are suggesting readers buy calls right here with Friday's move over $70.00. More conservative traders may want to wait for the stock to clear last week's high near $71.65 first. Our target is the $74.95-76.00 zone or the simple 50-dma, whichever one BDX hits first.

FYI: The Point & Figure chart, while still bearish, is very close to a new buy signal.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 70.00 BDX-LN open interest= 137 current ask $4.10
BUY CALL DEC 75.00 BDX-LO open interest= 292 current ask $1.75

Annotated Chart:
BDX

Picked on November 09 at $ 70.73
Change since picked:      + 0.00
Earnings Date           11/05/08 (confirmed)
Average Daily Volume =       1.9 million  


Bunge Ltd. - BG - close: 44.22 change: +3.22 stop: 40.49

Why We Like It:
Investors did not show much reaction on Wednesday when it was announced that Corn Products International (CPO) said its Board of Directors planned to withdraw its support of the proposed merger between CPO and BG. Bunge, the acquirer, naturally said they were disappointed but has not announced any action yet to this news. I suspect, deal or no deal, that BG's stock may have bottomed here. On Thursday, when the market selling was at its worst, the stock found support in the $41.00-40.60 zone. Traders were quick to buy the dip on Friday.

We are suggesting readers buy calls on BG now with a stop loss at $40.49. More aggressive traders may want to use a stop loss just under $40.00 instead. We're setting two targets. Our first target is $49.50. Our second target is $54.75. More aggressive traders may want to try for a rise toward $59.

FYI: The latest data listed short interest at 13% of BG's 133.8 million-share float. That is an above average amount of short interest. If BG continues to rally short-covering could give the stock a boost. Plus, it's worth noting that the P&F chart for BG is very bullish with an $86 target.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 45.00 BGW-LI open interest=1152 current ask $4.90
BUY CALL DEC 50.00 BGW-LJ open interest= 440 current ask $2.85

Annotated Chart:
BG

Picked on November 09 at $ 44.22
Change since picked:      + 0.00
Earnings Date           10/23/08 (confirmed)
Average Daily Volume =       3.7 million  


Compass Minerals Intl. - CMP - close: 58.19 change: +3.32 stop: 52.35

Why We Like It:
Winter is around the corner are you ready for it? One company that looks poised to do well is CMP, which has two main divisions. It has a salt division that sells a lot of rock salt for deicing roads and a division for specialty fertilizer (a.k.a. potash). Last year the road-salt division sold out and they're expecting another strong year this year. The last couple of weeks has seen CMP's stock price breakout from a multi-month bearish channel. Shares displayed a lot of relative strength on Friday. We think the rally will continue although we'll need to keep a wary eye on potential resistance at the 100-dma and 200-dma.

We're starting the play with a stop loss 10% under current levels. Our first target is $63.50. Our second target is $69.00.

FYI: The most recent data listed short interest at 7% of the very small 31.7 million-share float. That could be an additional catalyst for sharp moves higher if bears decide to cover. Plus, the P&F chart is bullish with a $93 target.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 55.00 CMP-LK open interest= 144 current ask $8.30
BUY CALL DEC 60.00 CMP-LL open interest= 248 current ask $5.70
BUY CALL DEC 65.00 CMP-LM open interest= 647 current ask $3.70

Annotated Chart:
CMP

Picked on November 09 at $ 58.19
Change since picked:      + 0.00
Earnings Date           10/28/08 (confirmed)
Average Daily Volume =       982 thousand 


ITT Educ. Services - ESI - close: 86.20 change: +1.87 stop: 82.85

Why We Like It:
Some of the education stocks are turning around. ESI recently reported strong earnings and said that in spite of the financial market woes that most of its students are not having additional trouble getting funding. It's true that lending has tightened somewhat but the schools are seeing higher enrollments.

Shares of ESI just bounced from a test of short-term support near its 10-dma and 50-dma. This looks like an entry point to buy calls. There is some round-number resistance at $90.00 but we are targeting a rally into the $95 region. Our exit point will be $94.50. There is some resistance just above $95 (see chart). FYI: The Point & Figure chart is bullish with a $108 target.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 85.00 ESI-LQ open interest= 300 current ask $6.90
BUY CALL DEC 90.00 ESI-LR open interest= 727 current ask $4.40
BUY CALL DEC 95.00 ESI-LS open interest= 275 current ask $2.50

Annotated Chart:
ESI

Picked on November 09 at $ 86.20
Change since picked:      + 0.00
Earnings Date           10/23/08 (confirmed)
Average Daily Volume =       1.4 million  


FedEx Corp. - FDX - close: 64.58 change: +2.04 stop: 61.95

Why We Like It:
It might seem kind of silly to add FDX as a bullish play when we're facing an economic recession. However, the crushing drop in oil prices and thus fuel prices could be a real boon for the company. The wildcard that I can't answer is how much, if any, FDX hedged their fuel costs and if those hedges are now losses. Based on the chart and the bounce from its 10-dma on Friday this looks like a new entry point to buy calls.

We're suggesting readers buy calls now with a stop loss under Thursday's low. We have two targets. Our first target is $68.85. Our second target is 73.00 or its 50-dma, whichever one FDX hits first. FYI: The Point & Figure chart is bullish with a $100 target.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 65.00 FDX-LM open interest= 379 current ask $5.30
BUY CALL DEC 70.00 FDX-LN open interest= 555 current ask $3.10

Annotated Chart:
FDX

Picked on November 09 at $ 64.58
Change since picked:      + 0.00
Earnings Date           12/18/08 (unconfirmed)
Average Daily Volume =       4.0 million  


Hess Corp. - HES - close: 61.23 change: +4.50 stop: varies

Why We Like It:
Believe it or not a good number of the oil stocks have turned bullish in spite of the breakdown in oil prices. HES is one such stock that held up reasonably well during last week's two-day sell-off. Traders quickly bought the dip on Friday but we are somewhat concerned by the lack of volume on Friday's gain.

We are going to list two different entry points depending on what happens on Monday. Our first entry point will be to buy calls on a breakout over short-term resistance at $62.00 with a trigger at $62.25. Under this scenario our stop loss will be 56.95. Our alternative entry point will be a dip in the $58.00-57.00 zone. If triggered at $58.00 our stop loss will be $54.95.

Our target is the $68.00-70.00 zone.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 60.00 IGG-LL open interest= 601 current ask $8.00
BUY CALL DEC 65.00 IGG-LM open interest=1133 current ask $5.50

Annotated Chart:
HES

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           10/29/08 (confirmed)
Average Daily Volume =       6.5 million  


NEW STRANGLE & SPREAD PLAYS


SPDR GOLD Trust - GLD - close: 72.50 change: +0.28 stop: n/a

Why We Like It:
Gold prices have been incredibly volatile this year. This relative calm over the last couple of weeks is narrowing, which suggests a breakout should be imminent.

We are listing two strangles to take advantage of this set up in gold prices. The first strangle uses November options, which expire in two weeks. Thus it's much more risky. The second strangle uses December options.

Note: If GLD prices gap open outside the $71.75-73.50 range on Monday morning we'll have to adjust our strike prices based on the move or abort the play.

What is a strangle?
A strangle involves buying both an out-of-the-money call and an out-of-the-money put. We don't care what direction the stock goes as long as it moves one direction. If the stock moves far enough one side of our trade will rise in value and pay for the entire trade and make a profit.

-November Strangle-

Suggested Options:
We are suggesting readers buy the November $75 call and the $70 put. Our estimated cost is $3.10. We want to sell if either option hits $5.25. There are only two weeks left before November options expire.

BUY CALL NOV 75.00 GVD-KW open interest=8569 current ask $1.60
-and-
BUY PUT NOV 70.00 GVD-WR open interest=5443 current ask $1.50

-December Strangle-

Suggested Options:
We are suggesting readers buy the December $75 call and the $70 put. Our estimated cost is $6.30. We want to sell if either option hits $12.00

BUY CALL DEC 75.00 GVD-LW open interest=3083 current ask $3.30
-and-
BUY PUT DEC 70.00 GVD-XR open interest=2795 current ask $3.00

Annotated Chart:
GLD

Picked on November 09 at $ 72.50
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =           million  


In Play Updates and Reviews

The Volatilty Index (VIX) has reversed

Play Editor's Note: We are adding a bunch of new candidates to the newsletter this evening. However, I want to point out the charts in Jim's weekend market wrap. The specific charts that show the huge range for the DJIA and the S&P 500 and we're stuck right in the middle.

If you are feeling the least bit hesitant to jump back into the markets I want to say, "it's okay." You don't have to. More conservative traders should probably NOT open new positions at this time. A better entry point would be on a bounce from the bottom of the range or a breakout through the top of the range if you're bullish, just the opposite if you're bearish.

Now, just a reminder with all of our suggested plays below...It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.


CALL Play Updates

*None* Please see tonight's new plays.


PUT Play Updates

Volatility Index - VIX - cls: 56.10 chg: - 7.58 stop: n/a

Seven more days. That is all we have left before November options stop trading. Expiration is November 19th but they stop trading at the end of the day before (Tues. Nov. 18th). Where will the VIX be? Right now the trend is down. Friday's session delivered a perfect failed rally after a two-day oversold bounce.

If I had to make a trade from here I would be selling at-the-money or out-of-the-money November calls. More aggressive traders could try selling some in-the-money calls but I wouldn't go deeper than the 50 strikes. You will want to use some sort of stop loss, mental or otherwise, to buy back your short position if the VIX reverses higher again (example: if the VIX trades over 65, buy back your calls).

If the VIX is under your call's strike price at expiration (11/19/08) they'll expire at zero ($0.00) and you keep all the premium you sold it for.

Overall we are not suggesting readers buy new put positions.

Note: The VIX options, which are European style options, have a unique expiration date. November VIX options expire on November 19th, 2008. The last day of trading for these options is the Tuesday before expiration. For more information check this link:
http://www.cboe.com/Products/indexopts/vixoptions_spec.aspx

Our September 16th put position (suggested entry at 30.30) has a 25.50 target. In all honesty this position may be dead. We still have plenty of time with these next two. The September 29th position (suggested entry at 46.72) has two targets at 36.00 and 31.00. Our October 8th position (entry 57.53) has two targets at 40.00 and 35.00.

Annotated Chart:
VIX

Picked on September 16 at = 30.30 first position
Change since picked:       +25.80
Picked again Sept. 29 at =  46.72 second position
Changed since picked:      + 9.38
Picked again Octo. 08 at =  57.53 third position
Changed since picked:      - 1.43
Earnings Date            00/00/00
Average Daily Volume =        --- million  


Strangle & Spread Play Updates

CBOE Volatility Index - VIX - cls: 56.10 chg: - 7.58 stop: n/a

This next week could be exciting. We'll have a pretty good idea if our VIX spreads are going to be profitable or not. Right now, with the VIX's failed rally on Friday, it's moving the right direction and we know it can move fast.

If you wanted to open new spreads here you could. We're going to list a new VIX spread (#4) down below using the November 50 and November 65 strikes.

In tonight's update for the different positions I'm going to discuss more detail on where we should be profitable.

Please see the CBOE website for details on margin requirements for selling VIX options. Link:
http://www.cboe.com/Products/indexopts/vixoptions_spec.aspx

Note: VIX options are European style options that settle for cash at expiration. Furthermore VIX options have unique expiration dates. November options expire on Wednesday, November 19, 2008 and will stop trading on Tuesday, November 18th.

Position Summary:

VIX spread #2 with November options (date Oct. 12th):

We wanted to SELL the November 30 calls (opening price 10/13/08 was $ 8.60) and BUY the November 50 (opening price was $1.61) as a hedge against the VIX remaining elevated.

Hypothetically we have sold the November 30 calls at $8.60 (credit). We bought the Nov. 50 calls for $1.61 (debit). Based on these numbers we would need the VIX to close under 37.00 for us to be profitable. If it closes higher than 37.00 then the intrinsic value of the Nov. 30 calls will be higher than what we paid for it and we'll have to come up with the difference. Example: if the VIX is at 40.00 another $1.40 will be taken out of our accounts when the VIX options are settled because the Nov. 30 call will be worth $10.00.

Now, if you sold the higher-strike call (Nov.50) when we discussed it a couple of weeks ago you could have gotten $9.00-11.00 for it. Let's say you got $10.00 for it. Now our "credit" to our account is $8.60 for the Nov. 30 calls and $8.39 ($10.00 for selling Nov. 50 call minus the $1.61 we paid for it) for a total income of $16.99. This gives us a much wider margin for error. With this scenario, the VIX would have to close over 47.00 before we lost any money.

Alternatively if you sold the Nov. 50 call around $5.00 then our breakeven point is a VIX settling at 42.00.

In a different format the play is:

SELL CALL NOV 30.00 VIX-KF.
Monday 10/13/08 open 8.60, high 9.80, closed 8.40
Update 10/15/08 open 10.00, high 13.00, closed 13.00 
Update 10/16/08 open 13.70, high 16.20, closed 13.25
Update 10/17/08 open 15.55, high 17.70, closed 17.50bid
Update 10/20/08 open 16.30, high 17.20, closed 15.00bid
Update 10/21/08 open -----, high 15.50, closed 14.40bid
Update 10/22/08 open 16.40, high 19.20, closed 18.10bid
Update 10/23/08 open 17.50, high 21.40, closed 20.30bid
Update 10/24/08 open 25.00, high 26.50, closed 25.80bid
Update 10/27/08 open 26.32, high 26.45, closed 29.30bid<-high
Update 10/28/08 open 29.00, high 29.00, closed 23.70bid
Update 10/29/08 open 25.60, high 25.60, closed 26.20bid
Update 10/30/08 open 24.06, high 27.32, closed 25.20bid
Update 10/31/08 open 25.20, high 25.20, closed 24.30bid
Update 11/03/08 open 24.50, high 24.50, closed 21.50bid
Update 11/04/08 open 19.00, high 19.00, closed 16.80bid
Update 11/05/08 open 17.56, high 20.60, closed 20.20bid
Update 11/06/08 open 26.90, high 28.00, closed 27.50bid
Update 11/07/08 open 26.30, high 27.00, closed 24.70bid

-and-

BUY CALL NOV 50.00 VIX-KJ.
Monday 10/13/08 open 1.61, high 2.10, closed 1.50
Update 10/15/08 open 2.00, high 3.60, closed 3.60 
Update 10/16/08 open 3.70, high 5.50, closed 3.65
Update 10/17/08 open 4.50, high 5.30, closed 5.50ask
Update 10/20/08 open 3.90, high 5.30, closed 4.40ask
Update 10/21/08 open ----, high 4.70, closed 3.80ask
Update 10/22/08 open 4.30, high 6.60, closed 6.40ask
Update 10/23/08 open 5.70, high 7.70, closed 7.30ask
Update 10/24/08 open 10.10, high 11.00, closed 11.00ask
Update 10/27/08 open 11.43, high 13.80, closed 14.20ask<-high/suggested sell
Update 10/28/08 open 11.00, high 13.30, closed  9.40ask
Update 10/29/08 open  9.23, high 10.70, closed 11.00ask
Update 10/30/08 open  8.69, high 10.90, closed 10.00ask
Update 10/31/08 open 10.30, high 10.30, closed  9.00ask
Update 11/03/08 open  8.34, high 8.34, closed 7.00ask
Update 11/04/08 open  3.50, high 3.70, closed 4.00ask
Update 11/05/08 open  4.20, high 5.90, closed 5.60ask
Update 11/06/08 open  6.00, high 12.00, closed 11.20ask
Update 11/07/08 open  9.80, high 9.80, closed 8.00ask

Picked on October 12 at $ 69.95
Change since picked:     -13.85 
 

-

VIX spread #3 with November options (published 10/22/08):

We wanted to SELL the November 35 calls (10/23/08 opening price was $ 14.00) and BUY the November 60 (10/23/08 opening price was $3.00) as a hedge against the VIX remaining elevated. We'll fill in the prices Thursday morning. Our account will be credited with the amount for selling the November 35 calls, while it the price paid for the 60 calls will be deducted.

Hypothetically we have sold the November 35 calls at $14.00 (credit). We bought the Nov. 60 calls for $3.00 (debit). Based on these numbers we would need the VIX to close under 46.00 for us to be profitable. If it closes higher than 46.00 then the intrinsic value of the Nov. 35 calls will be higher than what we paid for it and we'll have to come up with the difference. Example: if the VIX is at 50.00 at settlement another $6.00 because the Nov. 35 call will be worth $20.00.

Now, if you sold the higher-strike call (Nov.60) when we discussed it a couple of weeks ago you could have gotten $5.50-6.50 for it. Let's say you got $6.00 for it. Now our "credit" to our account is $14.00 for the Nov. 35 calls and $3.00 ($6.00 for selling the Nov. 60 call minus the $3.00 we paid for it) for a total income of $17.00. This gives us a much wider margin for error. With this scenario, the VIX would have to close over 52.00 before we lost any money.

Alternatively if you sold the Nov. 50 call around $3.00 then our breakeven point is a VIX settling at 49.00.

In a different format the play is:

SELL CALL NOV 35.00 VIX-KI
Wednesday 10/22/08 closed at 14.00 bid
Update 10/23/08 open 14.00, high 17.00, closed 15.30bid
Update 10/24/08 open 19.40, high 21.50, closed 20.60bid
Update 10/27/08 open 23.00, high 23.00, closed 23.90bid <-high
Update 10/28/08 open 22.93, high 24.70, closed 18.60bid
Update 10/29/08 open 19.59, high 21.13, closed 20.90bid
Update 10/30/08 open 18.50, high 22.00, closed 20.30bid
Update 10/31/08 open 21.10, high 21.10, closed 19.20bid
Update 11/03/08 open 19.31, high 19.31, closed 19.10bid
Update 11/04/08 open 14.80, high 14.80, closed 11.80bid
Update 11/05/08 open 13.05, high 14.40, closed 15.30bid
Update 11/06/08 open 17.60, high 23.90, closed 22.00bid
Update 11/07/08 open 21.40, high 21.40, closed 19.30bid
-and-

BUY CALL NOV 60.00 VIX-KN
Wednesday 10/22/08 closed at 3.70 ask
Update 10/23/08 open 3.00, high 4.50, closed 4.10ask
Update 10/24/08 open 7.00, high 7.00, closed 6.90ask
Update 10/27/08 open 6.91, high 8.80, closed 9.00ask <-high/suggested sell
Update 10/28/08 open 7.60, high 8.60, closed 5.50ask
Update 10/29/08 open 5.40, high 6.30, closed 6.50ask
Update 10/30/08 open 4.90, high 6.20, closed 5.80ask
Update 10/31/08 open 5.90, high 6.10, closed 4.90ask
Update 11/03/08 open 4.60, high 4.81, closed 3.50ask
Update 11/04/08 open 1.15, high 1.60, closed 1.75ask
Update 11/05/08 open 1.66, high 2.70, closed 2.45ask
Update 11/06/08 open 2.80, high 6.90, closed 6.30ask
Update 11/07/08 open 5.70, high 5.70, closed 3.30ask

Picked on October 12 at $ 69.65
Change since picked:     -13.55 

Annotated Chart:
VIX


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.

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