Opening Better, AMAT, DELL Earnings, Expiration This Week

In Europe, the FTSE was slightly lower at 5169, and the DAX slightly higher at
4882. In Asia, the Nikkei dropped 1.6% to 11,337, while the Hang Seng gained .8%
to 11,733.

Three things that are important to the market this week:
(
AMAT |
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Chart |
News |
PowerRating) earnings,
(
DELL |
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Chart |
News |
PowerRating) earnings, and the fact that it is May expiration week. AMAT earnings
will be released tomorrow after the close and DELL earnings Thursday after the
close. I would expect these two sets of earnings to be accompanied by a fair
amount of cheerleading and spin-doctoring, so there is a strong possibility of a
short squeeze taking place at some point this week. May options expiration is
Friday for most equity options, so that may add a little volatility early in the
week, and subtract a little later in the week.

Volatility

Friday the VIX gained .67 to 25.03, the VXN picked up 2.65 to 50.73, punching
out a new high on the move in the process. The QQV gained 1.39 to 43.01.

Trade Updates (5/10/02)

The only trade executed today was the
(
WMT |
Quote |
Chart |
News |
PowerRating)/
(
TGT |
Quote |
Chart |
News |
PowerRating) put swap. We sold the
WMT June 55 puts at $2.65 and  bought the TGT June 40 puts at $1.10 for a
net $1.55 credit. That effectively closes out the remaining WMT June 55 puts at
a $3.65 profit, and leaves us long the TGT June 40 puts at $1.10. We’ll keep it
listed under "New Actions" for the next couple of days for those who
missed it.

New Actions (New Recommendations)

(
JNJ |
Quote |
Chart |
News |
PowerRating) — Currently, we are long the JNJ January 60 puts at $3.30
(50%). Buy the remaining 50% on a rally into the $63.00 area.

(
WMT |
Quote |
Chart |
News |
PowerRating)/
(
TGT |
Quote |
Chart |
News |
PowerRating) –Traders long the WMT June 55 puts may sell them
(to close) and buy the TGT June 40 puts (to open). Do this swap for a $1.50
credit (for example, buy the TGT June 40 puts at $1.00, sell the WMT June 55
puts at $2.50). To get this done, WMT will have to sell off a bit, or TGT rally
a bit. This trade lets us realize a $2.50 profit on the WMT puts and gives us
the TGT puts for free. Filled 5/10/02.

Working Orders (Old Recommendations)

(
CHIR |
Quote |
Chart |
News |
PowerRating) — Sell all CHIR July 50 calls at $1.00 to close.

(
MLNM |
Quote |
Chart |
News |
PowerRating) — Sell all MLNM May 25 calls at $.50 to close.

(
MSFT |
Quote |
Chart |
News |
PowerRating) — Buy the June/July 50 put calendar spread (buy the July 50 puts,
sell the June 50 puts) at $.50 (50%).

Rolls/Adjustments:

(
DYN |
Quote |
Chart |
News |
PowerRating) — Holders of the DYN January 15 call/June 20 call proxy
buy-write (long the January 15 calls, short the June 20 calls at $3.20),
buy the June 20 calls (to close) and sell the September 17.5 calls (to open) for
$1.25 credit (to you).

(
HAL |
Quote |
Chart |
News |
PowerRating) — Holders of the HAL July 20 buy-write, work to sell the HAL July
17.5/20 call spread at $1.00. This will "roll" the position into the
July 17.5 buy-write.

Buy-writes

Proxy buy-writes

(
DYN |
Quote |
Chart |
News |
PowerRating) — Long the January 15/June 20 proxy buy-write at $3.20 (50%).

Call Spread Positions

None.

Put Positions

(
TGT |
Quote |
Chart |
News |
PowerRating) — Long the June 40 puts at $1.10 (37.5%).

(
WMT |
Quote |
Chart |
News |
PowerRating) — Long the June 55 puts at $1.00 credit, due to roll on 5/6/02
(37.5%). Closed out at $2.65 on 5/10/02.

Spread Positions