Industrial Flow

The market is looking basically
unchanged at this hour as there was just enough bullish news
(Unemployment Rate 5.6% vs. 5.9% consensus) and bearish news (Non-farm payrolls
-89k vs. -50k consensus and Hourly Earnings 0.0% vs. 0.2% consensus) to hold
things in check.

Short-term momentum is up, but a fair amount of that was
the contrived end-of-the-month mark-up seen the last two days.

I have mentioned this a few times before, but what I think
we’re starting to see here is a flow into older industrial stocks that will a)
benefit from the coming economic turnaround and b) people feel they can trust. I
think this might be a continuing theme for a while as funds reconfigure their
portfolios into the "CYA" formation.

OSeXy

The explosion at a refinery in Kuwait has sent oil higher
and oil and oil service stocks with it. We missed the oil service stocks and
will have to wait for a pullback.

Updates

We missed these trades, but just in case, we will be a
scale-down buyer of the Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating) May 55/60 call spread, starting
at $1.50 for a 25% allocation. We will get a little more aggressive if they can
hold these breakout levels.

Still gamma scalping
(
GILD |
Quote |
Chart |
News |
PowerRating).

Current Recommendations

Buy the SLB May 55/60 call spread (buy the 55 calls, sell
the 60 calls) for $1.50 (25%).

Suspend the buy puts on rallies for the time being.

Technical Levels

Currently unavailable due to program failure. My
apologies.

Rolls/Adjustments

None.

Recap of open trades

Long-term

Reverse Collars

(
TLAB |
Quote |
Chart |
News |
PowerRating) — March 17.5/15 reverse collar (long the
March 17.5 calls, short the March 15 puts) at $1.50 credit average (50%).

(
AMD |
Quote |
Chart |
News |
PowerRating) — April 25/15 reverse collar (long the April 25
calls, short the April 15 puts) at $.05 credit (100%).

Buy-writes

None — volatility too low! Again, this is a general
recommendation. Specific opportunities always exist.

Proxy buy-writes

(
BA |
Quote |
Chart |
News |
PowerRating) Jan. ’03 35/May 45 call calendar @ $4.75.

BA Jan. ’03 40/May 45 call calendar @ $2.75.

Complex Strategies

(
GILD |
Quote |
Chart |
News |
PowerRating) — Long the GILD Feb. 70 straddle at $8.00
(50%). Gamma scalping in progress…

Short-term

Call Positions

None.

Call Spread Positions

(
DYN |
Quote |
Chart |
News |
PowerRating) — Long the March 30/40 1:2 call ratio spread @
$1.50.

TLAB — Long the March 17.5/22.5 call spread at $.80
credit average (50%). Note: This spread is a result of a reverse collar
roll.

Put Positions

(
QQQ |
Quote |
Chart |
News |
PowerRating) — Long the March 39 puts at $2.35 (25%). Stop
below.

Put Spread Positions

(
AZO |
Quote |
Chart |
News |
PowerRating) — Long the March 55/65 put spread @ 2.125
(100%).

STOPS

(
AMD |
Quote |
Chart |
News |
PowerRating): Stop @ 14.90, close only.

QQQ: Stop @ 39.50, two consecutive days close only.

TLAB: Stop @ 11.95, close only.