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Two Steps Forward, One Step Back...

Concerns about slowing corporate profits, oil prices and a weak dollar sent stocks tumbling Wednesday as investors discounted the possibility of further upside potential from the current lofty levels. The Dow closed down 107 points at 10,805, while the NASDAQ fell 12 points to 2,061 and the S&P 500 index dropped 12 points to 1,207.

Most of the older (February) plays in the OW Portfolio were not affected by the sell-off, however the new positions in Blue Coat Systems (NASDAQW:BCSI) and Sohu.com (NASDAQ:SOHU) retreated in conjunction with the widespread slump in technology stocks. Although the sharp decline provided favorable entry prices for these issues, it remains to be seen whether they will rebound or continue to move lower in the coming weeks. At the same time, the broad slide in equity values has provided a better environment for initiating bullish trades and we should be able to find some excellent "premium-selling" candidates during the next few sessions.

OW Staff

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