It’s All Good, Baby!

Currently the DJI futures are 140.0 higher, the S&Ps are 14.80 better, and the
Nasdaq 100 futures are  bid 30.00 higher. Europe is cruising at the moment with
the FTSE 100 up 131.70 points or 3.29% , the DAX is up by 120.63 points or
3.81%, and the CAC 40 is 71.12 points or 2.29% better. In Asia, the Nikkei
gained 45.24 points or .52%, and the Hang Seng rose a whopping 313.15 points or
3.33%. Interest rate futures are lower, the dollar is modestly higher (sell it),
crude futures (December) are $.25 lower, and gold futures are down a hair.

As we head into what looks to be a two to three day orgy for the bulls, it will
be important to remain disciplined and vigilant. We will look to turn our long
call positions into vertical spreads by selling an equal number of further
out-of-the-money calls against them, and we may add to our bearish positions in
the retail sector.

Volatility

Volatility was crushed Friday with a combination of the passing of the
payroll numbers, the rally, and the fact that it was Friday, delivering the
1-2-3 punch. The VIX fell 1.93 to 33.97, the VXN dropped 3.13 to 49.86, and the
QQV fell 2.68 to 42.04. Even though we are set to rally, vol will probably
remain relatively firm into the election/FOMC, but pros should
use that as a selling opportunity, as it should resume its freefall afterward.

Update: (11/01/02)

DIA — Bought the November 80/84/85/89 call condor for $1.50 (25%).

DIA — Bought the December 80/84/86/90 call condor for $1.20 (25%).

KSS — Bought the January 50/60 put spread for $3.00 (25%).

New Recommendations

None.

Working Orders (Old Recommendations)

BGEN — Those who bought the January 40 calls at $2.10 (25%), sell an
equal amount of the January 45 calls at $1.10 to flip into the January 40/45
call spread at $1.00.

QQQ — Those who sold the January 23 /26 call spread at $1.50, bid $1.80 for the
January 20 /23 call spread (somewhere near $23.00 should get you done).

WAG — For those long the January 35 puts ($2.50, 50%), sell an equal number of
the January 30 puts at $1.50 to flip into the January 30/35 put spread at $1.00.

Buy-writes

HAL — Long the January 15 buy-write at $12.05 (100%).

Proxy buy-writes

DYN — Long the January 15 calls at $3.20 — left over from proxy buy-write
(50%). Left for dead.

Complex Strategies

BGEN — Long the January 40 calls at $2.10 (25%).

CCU — Long the January 40 calls at $2.00 (25%).

Call Spread Positions

DIA — Long the November 80/84/85/89 call condor at $1.50 (25%).

DIA — Long the December 80/84/86/90 call condor at $1.20 (25%).

QQQ — Short the January 23/26 call spread at $1.50 (25%).

Put Positions

KSS — Long the January 50/60 put spread at $3.00 (25%).

WAG — Long the January 35 puts at $2.50 (50%).

Spread Positions