Holiday Market In Progress, Flat To Lower Opening Ahead

In Europe, the FTSE 100 is showing a gain of 57.30 points, or 1.43%, the DAX is
down 15.11 points, or 0.45%, and the CAC 40 is up 17.46 points, or 0.55%. In
Asia, the Nikkei was closed for a holiday, and the Hang Seng slid 145.84 points,
or 1.51%.

On the economic front, business inventories rose 0.4% vs. consensus estimates of
0.2%, having little effect upon the market. In other news, Boeing
(
BA |
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PowerRating) has
announced that they may have to cut jetliner production again because of
continuing losses among US airlines. Genzyme Corp.
(
GENZ |
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PowerRating) cut earnings
estimates again because of declining sales of  Renagel, used by kidney
dialysis patients. J.P. Morgan’s
(
JPM |
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PowerRating) claims of fraud against 11 insurers
were dismissed, dealing a blow to the company’s efforts to collect over
$960M for losses on oil and gas trades with Enron.

Another lowering of estimates for semiconductor companies, this time by
Pru-Bache, is also weighing on the markets (where have these guys been?). The
firm is lowering estimates on
(
NVDA |
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PowerRating),
(
ANAD |
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PowerRating),
(
PMCS |
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PowerRating),
(
LSI |
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PowerRating),
(
TXN |
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PowerRating) and
(
BRCM |
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PowerRating). Is it just me, or does the recent set of downgrades
in this sector on the lows make you want to go long?

 

Volatility

A holiday today and a rally out of the hole took its toll on volatility
Friday. The VIX fell 1.41 to 39.31, the VXN fell .59 to 55.85, and the QQV
dropped .71 to 47.32. Expect a slow day today, and probably another volatility
decline.

Strategy

Tomorrow before the opening, we have earnings from Best Buy
(
BBY |
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PowerRating),
and Circuit City
(
CC |
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PowerRating) on Wednesday. We will be looking to add to our short
positions in the retailers on any strength into those numbers.
(
CCU |
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PowerRating)
continues to look good, and we will be buying calls on dips.

Update: (09/13 /02)

Nothing done today. Keep the
(
MMM |
Quote |
Chart |
News |
PowerRating) orders (below) in the market Monday.

New Actions (New Recommendations)

None.

Working Orders (Old Recommendations)

(
BP |
Quote |
Chart |
News |
PowerRating) — Buy the October/January 40 put calendar spread (buy the January 40
put, sell the October 40 put) at $1.15 (25%).

(
QQQ |
Quote |
Chart |
News |
PowerRating) — Sell half of the September 23/26 1:2 ratio call spread at $1.50,
the remainder at $2.00.

(
MMM |
Quote |
Chart |
News |
PowerRating) — Sell 25% of the October 110/120 call spread at $4.00 and 25% at
$5.00 (away now).

Buy-writes

(
HAL |
Quote |
Chart |
News |
PowerRating) — Long the January 15 buy-write at $12.05 (100%).

Proxy buy-writes

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

Complex Strategies

(
IBM |
Quote |
Chart |
News |
PowerRating) — Long the January 50/60 put spread at $2.00 (50%).

(
KSS |
Quote |
Chart |
News |
PowerRating) — Long the January 60/70 put spread at $3.00 (25%).

(
S |
Quote |
Chart |
News |
PowerRating) — Long the January 35/45 put spread at $3.00 (25%).

(
CCU |
Quote |
Chart |
News |
PowerRating) — Long the October 35 calls at $2.50 (10%).

Call Spread Positions

DJX — Long the September 86/90 1:2 ratio call spread at $.50 (50%).

(
QQQ |
Quote |
Chart |
News |
PowerRating) — Long the September 23/26 1:2 ratio call spread at $.50 (50%).

Put Positions

None.

Spread Positions

(
AHC |
Quote |
Chart |
News |
PowerRating) — Long the October 65/70 put spread at $1.50 (25%).

(
C |
Quote |
Chart |
News |
PowerRating) — Long the December/September 30 put calendar spread at $.975 (50%).

C — Long the January/September 30 put calendar spread at $1.20 (50%).

(
CCU |
Quote |
Chart |
News |
PowerRating) — Long the October 35 calls at $2.50 (10%).