Light Day Or Breakdown Day?

Housing starts came in lower than expected at 1.603M versus consensus
expectations of 1.71M, but building permits came in slightly better than
expected, at 1.763M versus an expected 1.698M. No impact there. Currently, DJI
futures are 25.0 lower, S&P futures are 2.50 lower, Nasdaq 100 futures are 2.50
lower. Interest rate futures have a slight bid to them, and the dollar is
slightly higher against the major foreign currencies after yesterday’s upside
reversal. Crude futures are about $.30 higher, and gold futures are up $.60.
Keep an eye on the dollar, its newfound strength is a direct reflection of
interest rate cut expectations and will give a good indication as to what the FX
crowd is expecting as far as how much.

On a lower trade today, the COMP and NDX may pay a visit to their 20-day moving
averages, and it might be worth taking a shot on the long side (with a tight
stop, of course). For daytraders only. We’ll be trolling through the semi sector
today to look for shorting possibilities ahead.

Volatility

Yesterday, the VIX managed to squeak out a slight gain, picking up .25
to close at 31.36, but volatility continues to head south elsewhere, with the
VXN dropping 2.56 to 45.52, and the QQV falling 1.57 to 40.59. As trade dies,
volatility will die with it, hopefully providing us with a buying opportunity
late in the year or early next year.

Update: Tuesday  (11/19/02)

Nothing done today, although we got close on the DIA January condors at
one point. Unfortunately, the lower volatility goes, the more difficult it will
be for us to buy the condor.

New Recommendations

BGEN — Sell the January 45 calls against the long January 40 calls at
$2.00 (one-for-one).

DIA — Buy the January 80/84/88/92 call condor at $1.20 or better (25%).

Working Orders (Old Recommendations)

CIEN — Buy the January 2.5 puts at $.05 to close.

WAG — Sell  half the January 30/35 put spread at $3.00, half at $4.00 to close.

QQQ — Subscribers short the January 23/26 call spread at $1.50 (25%), leave an
order in the market to purchase the spread at $1.50 to close the trade.

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 $3.00 (25%).

Call Spread Positions

BGEN — Long the January 40/45 call spread at $1.00 (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

None.

Put Spread Positions

BAC — Long the January 60/70 put spread at $2.90 (25%).

KSS — Long the January 50/60 put spread at $2.475 (50%).

WAG — Long the January 30/35 put spread at $1.00 (50%).