It was back to the record books Wednesday as stocks skyrocketed in afternoon trading. With no surprises showing up in the release of Federal Reserve’s previous meeting minutes, the Street turned decidedly bullish. The S&P 500 shot up 12 points on the day and finished at its first record close in over seven years. The Dow Jones notched another one in the record books with its 111-point rise. Meanwhile the Nasdaq finished at a new 6-year high.

Today’s wording from the Fed left Wall Street with the feeling that the committee will keep its tightening bias on hold. While the Fed still sees inflation as the main threat to the economy, it also said that the risk of an abrupt slowdown in economic growth had diminished.

Although the day ended at historic levels, you wouldn’t of known it based on the pre-market activity. Overnight it was the “Shanghai Sell-off” as Chinese stocks slid 6.5 percent. This was caused by the Chinese government hiking the stock trading tax in order to cool rampant speculation. The overseas selling caused the U.S. markets to open up sharply lower, however, by midmorning all three indices show their resilience by shaking off the losses.

Today’s move was just what the doctor ordered for our spreads. We now have our comfortable cushion back on most of them and even Monster Worldwide bounced off support. With only a little over two weeks left in the June cycle, we seem to be sitting in great shape.

In our spread update section (below), we have left our previous support levels the same to show how the stocks reacted to them. With the updated charts, it really displays why our strike prices are placed at specific areas.

CURRENT JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00RTI International Metals had a big day. Its $2.54 move up took it above its 20 sma. It appears that we are starting to get back some breathing with it now trading $5.80 over our strike price.

UNP 115 - 110 June Bull Put Spread (20 contracts entered on 05/17/07)
Potential Profit $1,700.00
After testing support last Thursday, UNP has rebounded nicely. It has been following its 20 sma up the chart. With big money flowing into UNP and the rail sector, we don’t see this one falling anytime soon. As long as it continues to be slow and steady we should make it down the track on this one.

X 100 - 95 June Bull Put Spread (20 contracts entered on 05/21/07)
Potential Profit $1,100.00U.S. Steel is once again closing in on its all-time high. This area should be the next level of resistance for it. With buyouts and takeover rumors driving this sector, we should see X stay around these record levels. We are sitting very comfortable in this spread with over a 12-point cushion.

MNST 45 - 40 June Bull Put Spread (20 contracts entered on 05/21/07)
Potential Profit $1,400.00
MNST has been testing our areas of support on the chart. Although it fell below our first support zone, it’s interesting to see how it bounced off the second one today. This support is definitely the strongest for MNST with the 50 sma along with recent support and back in December and early January.

Monster Worldwide Inc. was also in the news today with it signing a two-year contract to provide job recruitment services through Comcast.net. Although it has been painful to watch MNST fall, we still have very good support on the chart and over a $1.50 cushion on a stock that trades for less than $50. Let’s sit back and be patient with this one.

NMX 115 - 110 June Bull Put Spread (20 contracts entered on 05/24/07)
Potential Profit $900.00
Nymex Holdings has received attention from its backing of a Dubai exchange that is ready to launch futures trading on sour crude. This will be in direct competition with the recent expansion of ICE in the Middle East.

NMX has rock solid support on the chart and appears to be heading towards the upper end of its trading range. It’s now trading over 12 points above our strike price.

As always, Trade Happy and Trade Smart

The major indexes bounced back on Friday as investors anticipated more merger and acquisition news when the markets open up this week. The move up was a welcome sign after Thursday’s selling. However, the volume was relatively low due to the extended Memorial Day weekend.

Even though Friday was a quiet day, all the green was perfect for our spreads. We were able to regain some of our cushions heading into the last three weeks of this cycle.

For the week, two of the three major indices closed slightly lower. The Dow’s .4% drop was its first since March. The S&P 500 fell .5% while the Nasdaq finished the week unchanged.

With the earnings season now done, this week will be shaped by economic data. Tuesday morning the consumer confidence report is released. On Wednesday the ADP’s employment data for May comes out. Thursday will be the FOMC minutes along with initial jobless claims and the GDP. Friday is the big day with May’s employment along with personal income and spending, ISM manufacturing data, and pending home sales for April. Remember, it’s not the reports that matter……it’s how the Street reacts to them.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)

Current Loss on Roll Over -$2,300.00

Potential Profit For Non Roll Over $2,380.00

Last Wednesday and Thursday were tough on RTI as it dropped to $81.55. It then bounced off support in this area and closed the week at $83.90. We now have almost a 4-point cushion and two layers of support.

UNP 115 - 110 June Bull Put Spread (20 contracts entered on 05/17/07)

Potential Profit $1,700.00

UNP was hurt last week when a Bear, Stearns & Co. analyst reported that all railroad operators’ carload volumes for the previous week fell 4.2 percent compared to a year earlier. After Friday’s move up, UNP is now sitting nearly $3 over our $115 strike price. We also have support under Thursday’s low with the 20 simple moving average.

X 100 - 95 June Bull Put Spread (20 contracts entered on 05/21/07)

Potential Profit $1,100.00

U.S. Steel held up the strongest for us last week. With merger news swirling in its industry, we expect X to continue rising. We have over an 8-point cushion and tons of support for us on the chart. Besides the levels that we have outlined below, Its 50 simple moving average is rising and currently sitting at $103.77.

MNST 45 - 40 June Bull Put Spread (20 contracts entered on 05/21/07)

Potential Profit $1,400.00

We had two difficult days in the spread and then MNST settled down once it hit support. As you can see on the chart we have layers of support levels working for us.

We entered this spread when the implied volatility of the options that we were selling was significantly higher (giving us a high premium). The implied volatility has since dropped and taken some of the premium out of the option pricing. Due to this, even though the stock has dropped, we are close to having a profit on this spread.

MNST is now sitting in the lower end of its trading range and we expect it to start working its way back up towards $50.

NMX 115 - 110 June Bull Put Spread (20 contracts entered on 05/24/07)

Potential Profit $900.00

Nymex Holdings dropped on Thursday after an analyst gave it a “Market Perform” and set a price target of $140. With a 115-110 put spread, we’ll take his price of $140. NMX is another chart with tons of support. It would take an all time low for it to reach our strike price……and we don’t see it happening.

As always, Trade Happy and Trade Smart

Once again, former Fed Chairman Alan Greenspan spooks the market. This time his comments were on the possibility that the China stock market could eventually see a sharp decline. Once his statement hit the wire, it only took 20 minutes for all of the day%u2019s gains to be wiped out. Although the major indices recovered briefly, all three ended the day in the red.

Earlier in the trading day, more merger and acquisition talked help push the Dow above 13,600 for the first time ever. This enabled all of our stocks to turn green. But this turned out to be short lived.

The Street will now look to find direction from economic reports being released on Thursday. The durable goods and new home sales should give the market direction tomorrow. Hopefully Greenspan is starting his Memorial Day weekend a little early.

Any day that the market is closed is great for our spreads. It%u2019s just a day less in the cycle and helps eat away at our time decay a little bit faster.

On the open tomorrow we are entering another spread for June, NYMEX Holdings Inc. We believe that NMX has been oversold due to its fallout with the company Optionable Inc. With all the consolidation talk in the exchange industry, we see it difficult for NMX to fall below its support. On the chart we have extremely strong support in the $120 area and NMX just broke above its 50 simple moving average.

NEW TRADE ALERT (JUNE SPREAD)

NYMEX Holdings Inc.

NMX 115 - 110 June Bull Put Spread (20 contracts entered on 05/24/07)

Sell 20 June 115 Puts

Buy 20 June 110 Puts

Credit Per Contract $ 0.45

Potential Profit $900.00

As always, be sure to double check your order and adjust the contract size to meet your risk tolerance and/or account size. Depending on when you place your orders, you might have to adjust the price by a nickel or a dime in either direction to get filled.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00RTI traded just like the rest of our spreads today. It was up early and stayed in the green until the %u201CGreenspan sell-off%u201D in the afternoon. While the previous highs are now making resistance at $89, we still have strong support sitting just below $84. We also have old resistance that seems to be solid support right at our strike price of $80. It would take significant news for it to fall through this number.

UNP 115 - 110 June Bull Put Spread (20 contracts entered on 05/17/07)
Potential Profit $1,700.00UNP bucked the trend today and finished up for the first time in four sessions. It wasn%u2019t much but we%u2019ll take it. The railroad stocks have been beaten up the last few days but UNP has held up the strongest. It is currently sitting above support and we also have more support in the area of our $115 strike price. We now have close to a $4 cushion in this spread.

X 100 - 95 June Bull Put Spread (20 contracts entered on 05/21/07)
Potential Profit $1,100.00
U.S. Steel suffered yesterday from a Goldman Sachs%u2019 statement that said steel has hit a soft patch in pricing. We are always going to have news affecting our spreads but we don%u2019t see it dropping much farther due to the continued demand for its product. When you combine that with the rampant consolidation talk in its industry, we believe this is just a little profit taking from its recent high. X is now resting on its 20 simple moving average and has solid support at and above our 100 strike price.

MNST 45 - 40 June Bull Put Spread (20 contracts entered on 05/21/07)
Potential Profit $1,400.00
Remember, in our style of trading it takes patience%u2026..patience%u2026.patience. This was hit hard yesterday when a Goldman Sachs analyst noted that a former CEO%u2019s recent stock sale may indicate the company won%u2019t be sold soon. There%u2019s been a rumor floating around that the company turned down a $58 per share offer from an undisclosed buyer.

Meanwhile MNST was back in the news again tonight when the new CEO wrote a letter stating that the board of directors acted promptly and decisively to address a stock options scandal by former members of management.

We need to use our patience to wait out the current news cycle. Although we are not in the ideal position, we still have a $1.39 cushion on this spread and layers of support. There has been some unusually high volume in after hours trading tonight. This appears to be a good sign but we will have to wait until the morning to see.

As always, Trade Happy and Trade Smart

Once again, former Fed Chairman Alan Greenspan spooks the market. This time his comments were on the possibility that the China stock market could eventually see a sharp decline. Once his statement hit the wire, it only took 20 minutes for all of the day’s gains to be wiped out. Although the major indices recovered briefly, all three ended the day in the red.

Earlier in the trading day, more merger and acquisition talked help push the Dow above 13,600 for the first time ever. This enabled all of our stocks to turn green. But this turned out to be short lived.

The Street will now look to find direction from economic reports being released on Thursday. The durable goods and new home sales should give the market direction tomorrow. Hopefully Greenspan is starting his Memorial Day weekend a little early.

Any day that the market is closed is great for our spreads. It’s just a day less in the cycle and helps eat away at our time decay a little bit faster.

On the open tomorrow we are entering another spread for June, NYMEX Holdings Inc. We believe that NMX has been oversold due to its fallout with the company Optionable Inc. With all the consolidation talk in the exchange industry, we see it difficult for NMX to fall below its support. On the chart we have extremely strong support in the $120 area and NMX just broke above its 50 simple moving average.

NEW TRADE ALERT (JUNE SPREAD)

NYMEX Holdings Inc.

NMX 115 - 110 June Bull Put Spread (20 contracts entered on 05/24/07)

Sell 20 June 115 Puts

Buy 20 June 110 Puts

Credit Per Contract $ 0.45

Potential Profit $900.00

As always, be sure to double check your order and adjust the contract size to meet your risk tolerance and/or account size. Depending on when you place your orders, you might have to adjust the price by a nickel or a dime in either direction to get filled.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)

Current Loss on Roll Over -$2,300.00

Potential Profit For Non Roll Over $2,380.00

RTI traded just like the rest of our spreads today. It was up early and stayed in the green until the “Greenspan sell-off” in the afternoon. While the previous highs are now making resistance at $89, we still have strong support sitting just below $84. We also have old resistance that seems to be solid support right at our strike price of $80. It would take significant news for it to fall through this number.

UNP 115 - 110 June Bull Put Spread (20 contracts entered on 05/17/07)

Potential Profit $1,700.00

UNP bucked the trend today and finished up for the first time in four sessions. It wasn’t much but we’ll take it. The railroad stocks have been beaten up the last few days but UNP has held up the strongest. It is currently sitting above support and we also have more support in the area of our $115 strike price. We now have close to a $4 cushion in this spread.

X 100 - 95 June Bull Put Spread (20 contracts entered on 05/21/07)

Potential Profit $1,100.00

U.S. Steel suffered yesterday from a Goldman Sachs’ statement that said steel has hit a soft patch in pricing. We are always going to have news affecting our spreads but we don’t see it dropping much farther due to the continued demand for its product. When you combine that with the rampant consolidation talk in its industry, we believe this is just a little profit taking from its recent high. X is now resting on its 20 simple moving average and has solid support at and above our 100 strike price.

MNST 45 - 40 June Bull Put Spread (20 contracts entered on 05/21/07)

Potential Profit $1,400.00

Remember, in our style of trading it takes patience…..patience….patience. This was hit hard yesterday when a Goldman Sachs analyst noted that a former CEO’s recent stock sale may indicate the company won’t be sold soon. There’s been a rumor floating around that the company turned down a $58 per share offer from an undisclosed buyer.

Meanwhile MNST was back in the news again tonight when the new CEO wrote a letter stating that the board of directors acted promptly and decisively to address a stock options scandal by former members of management.

We need to use our patience to wait out the current news cycle. Although we are not in the ideal position, we still have a $1.39 cushion on this spread and layers of support. There has been some unusually high volume in after hours trading tonight. This appears to be a good sign but we will have to wait until the morning to see.

As always, Trade Happy and Trade Smart

Today’s market action felt like last Friday all over again. After a disappointing Tuesday where we saw heavy selling in the afternoon, all three indices raced higher today with strong buying into the closing bell. This was a good example of why we don’t try to pick tops and bottoms. Instead, we want to ride the trend and fill our pockets along the way.

Traders were able to overlook an early morning report that showed the largest drop in building permits in 17 years. This was in part due to a rise in the U.S. crude and gasoline inventories along with a Federal Reserve report that stated an unexpected rise in industrial output for April.

NEW TRADE ALERT

Union Pacific Corp.

UNP 115 - 110 June Bull Put Spread (20 contracts entered on 05/17/07)

Sell 20 June 115 Puts

Buy 20 June 110 Puts

Total Credit Per Contract $ 0.85

Potential Profit $1,700.00

As always, be sure to double check your order and adjust the contract size to meet your risk tolerance and/or account size. Depending on when you place your orders, you might have to adjust the price by a nickel or a dime in either direction to get filled.
If you have maintenance issues, you might want to close out your May UNP spread early in order to free up funds to place this trade.

With only two days left in this cycle, today’s action has given us some breathing room heading towards Payday. Four out of our five May positions are now close to being worthless, which is just the way we like them. While our Wynn spread is now bouncing back at the perfect time. With that said, let’s take a look at our positions in detail………….

MAY SPREADS

GOOG 450 - 440 May Bull Put Spread (10 contracts entered on 04/23/07)
Potential Profit $900.00

GOOG 500 - 510 May Bear Call Spread (10 contracts entered on 05/03/07)
Potential Profit $450.00

Google finally snapped its losing streak and wiped out nearly two weeks of losses in one day of trading. It unveiled a new “universal search” where users will be able to view all of Google’s information (websites, video, images, news, maps, and books) from one easy-to-use webpage. This move to more of a comprehensive internet search capability infused some excitement in its stock. It is now sitting perfectly in the middle of our Iron Condor and it looks like we will profit on both sides!

WYNN 95 - 90 May Bull Put Spread (20 contracts entered on 04/23/07)
Potential Profit $1,300.00
Wynn Resorts Ltd. once again tested its support yesterday in the $95 area and was able to bounce back today. Its move up should allow us to make it out of this one with a profit. Our plan is to let this one continue moving up, however, if it starts to falter we are going to lock in a profit. If Wynn falls to $96.00 we are going to close out our May spread. If you are unable to monitor this position during market hours, then we suggest that you close out the position now.

Trading Plan IF
WYNN falls to $96.00

CLOSING MAY WYNN BULL PUT SPREAD (20 contracts entered on 04/23/07)

Buy 20 May 95 Puts (ones we previously sold)
Sell 20 May 90 Puts (ones we previously bought)

This will be for a profit. We suggest using a market order to get filled quickly.

GS 220 - 210 May Bull Put Spread (10 contracts entered on 04/26/07)
Potential Profit $1,700.00
Goldman Sachs made up for its decline earlier this week by climbing $2.73 on the day. The Financial Sector was pushed higher today when hedge fund manager Eddie Lampert disclosed an $800 million stake in Citigroup. After today’s move, GS has given us back our comfortable cushion and looks to be sitting fine with two days left.

UNP 110 - 105 May Bull Put Spread (20 contracts entered on 04/26/07)
Potential Profit $1,000.00
Union Pacific continued its amazing run today with help from Warren Buffet. His company Berkshire Hathaway Inc. disclosed to the SEC that it had purchased about 4% of the company’s stock. Buffet and billionaire activist Carl Icahn have been taking large stakes in the railroad sector. After today’s move, UNP is nearly 10 points above our strike price and firmly in the profit column.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00
After falling to a low of $82 this morning, RTI bounced back to finish the day at $83.96. While it was our only spread to finish negative, its afternoon action gives us comfort. Remember that we have plenty of time on this spread and as long as it continues drifting sideways we’re in good shape.

As always, Trade Happy and Trade Smart

Today%u2019s market action felt like last Friday all over again. After a disappointing Tuesday where we saw heavy selling in the afternoon, all three indices raced higher today with strong buying into the closing bell. This was a good example of why we don%u2019t try to pick tops and bottoms. Instead, we want to ride the trend and fill our pockets along the way.

Traders were able to overlook an early morning report that showed the largest drop in building permits in 17 years. This was in part due to a rise in the U.S. crude and gasoline inventories along with a Federal Reserve report that stated an unexpected rise in industrial output for April.

With only two days left in this cycle, today%u2019s action has given us some breathing room heading towards Payday. Four out of our five May positions are now close to being worthless, which is just the way we like them. While our Wynn spread is now bouncing back at the perfect time. With that said, let%u2019s take a look at our positions in detail%u2026%u2026%u2026%u2026.

MAY SPREADS

GOOG 450 - 440 May Bull Put Spread (10 contracts entered on 04/23/07)
Potential Profit $900.00GOOG 500 - 510 May Bear Call Spread (10 contracts entered on 05/03/07)
Potential Profit $450.00
Google finally snapped its losing streak and wiped out nearly two weeks of losses in one day of trading. It unveiled a new %u201Cuniversal search%u201D where users will be able to view all of Google%u2019s information (websites, video, images, news, maps, and books) from one easy-to-use webpage. This move to more of a comprehensive internet search capability infused some excitement in its stock. It is now sitting perfectly in the middle of our Iron Condor and it looks like we will profit on both sides!

WYNN 95 - 90 May Bull Put Spread (20 contracts entered on 04/23/07)
Potential Profit $1,300.00Wynn Resorts Ltd. once again tested its support yesterday in the $95 area and was able to bounce back today. Its move up might of just allowed us to make our full profit on this spread. While this spread has given us heart burn the last week, our combination of fundamentals and technicals could help us squeak this one out. We have left our plan listed below incase we see any drastic selling in the next two days.

Trading Plan IF
WYNN falls to $93.99

CLOSING MAY WYNN BULL PUT SPREAD (20 contracts entered on 04/23/07)

Buy 20 May 95 Puts (ones we previously sold)
Sell 20 May 90 Puts (ones we previously bought)
This will be closed for a loss.

OPEN JUNE WYNN BULL PUT SPREAD (20 contracts)

Sell 20 June 90 Puts
Buy 20 June 85 Puts
This will be opened for a credit and should help offset the loss.

We suggest using market orders to get filled quickly. As always, be sure to double check your order and adjust the contract size to your original number of contracts (if you currently have less than 20 contracts).

GS 220 - 210 May Bull Put Spread (10 contracts entered on 04/26/07)
Potential Profit $1,700.00
Goldman Sachs made up for its decline earlier this week by climbing $2.73 on the day. The Financial Sector was pushed higher today when hedge fund manager Eddie Lampert disclosed an $800 million stake in Citigroup. After today%u2019s move, GS has given us back our comfortable cushion and looks to be sitting fine with two days left.

UNP 110 - 105 May Bull Put Spread (20 contracts entered on 04/26/07)
Potential Profit $1,000.00
Union Pacific continued its amazing run today with help from Warren Buffet. His company Berkshire Hathaway Inc. disclosed to the SEC that it had purchased about 4% of the company%u2019s stock. Buffet and billionaire activist Carl Icahn have been taking large stakes in the railroad sector. After today%u2019s move, UNP is nearly 10 points above our strike price and firmly in the profit column.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00
After falling to a low of $82 this morning, RTI bounced back to finish the day at $83.96. While it was our only spread to finish negative, its afternoon action gives us comfort. Remember that we have plenty of time on this spread and as long as it continues drifting sideways we%u2019re in good shape.

As always, Trade Happy and Trade Smart

The easing of inflation concerns helped the market bounce back on Friday. After Thursday’s sluggish report from retailers, traders saw a positive sign when the core inflation rate remained in check. This left the Street feeling that the Fed shouldn’t have to raise rates to fight inflation. Instead, some analysts were predicting that we might see a rate cut later this year.

Investors were still buying the dips last week as two of the three major indices finished in the green. The Dow was up another .46 percent for the week, the S & P crawled up .02 percent while the Nasdaq gave back .39 percent on the week.

With the earnings season just about wrapped up, the Street will focus on economic data this week. Due to the inflation watch, everyone will be eagerly awaiting the Labor Department’s Consumer Price Index for April. This will be released on Tuesday and could be a big market mover.

Heading into the last week of our option cycle, we are sitting in good shape. Our only concern is the Wynn Resorts Ltd. spread. We have laid out a plan below on how we are going to handle it. With that said, let’s take a look at our positions in detail………….

MAY SPREADS

GOOG 450 - 440 May Bull Put Spread (10 contracts entered on 04/23/07)
Potential Profit $900.00

GOOG 500 - 510 May Bear Call Spread (10 contracts entered on 05/03/07)
Potential Profit $450.00

Google briefly fell below its 50 day moving average on Thursday’s sell-off but then bounced back above it on Friday. We are still sitting perfectly with our call strike price nearly 35 points above it and our put strike price almost 17 points below it. You might have noticed that the Google spread keeps its value much longer than our other spreads. Keep an eye on its value this week as it deteriorates at lightening speed.

WYNN 95 - 90 May Bull Put Spread (20 contracts entered on 04/23/07)
Potential Profit $1,300.00
Our only concern at this point is our WYNN spread. After excellent earnings, the stock has sold off and is sitting at support. We sent out an Alert on Friday morning with a plan to roll it out to June if it fell to $93.99.

We mentioned in the alert that we wouldn’t be surprised to see it test this support and then bounce off it. WYNN certainly did this but then sold off in the afternoon. Although we would like to be sitting better, we still have a cushion of $1.52 on the spread.

Heading into the final week, we are going to leave our roll-over plan the same (see below). However, don’t be surprised if we decide to close it out early this week. If we start to show a little profit in the spread, we might just decide to put it in the bank. Keep an eye on your email this week as we continue to monitor this one closely.

Trading Plan IF

WYNN falls to $93.99

CLOSING MAY WYNN BULL PUT SPREAD (20 contracts entered on 04/23/07)

Buy 20 May 95 Puts (ones we previously sold)
Sell 20 May 90 Puts (ones we previously bought)
This will be closed for a loss.

OPEN JUNE WYNN BULL PUT SPREAD (20 contracts)

Sell 20 June 90 Puts
Buy 20 June 85 Puts
This will be opened for a credit and should help offset the loss.

We suggest using market orders to get filled quickly. As always, be sure to double check your order and adjust the contract size to your original number of contracts (if you currently have less than 20 contracts).

GS 220 - 210 May Bull Put Spread (10 contracts entered on 04/26/07)
Potential Profit $1,700.00

Goldman Sachs responded last week just like we anticipated in last weekend’s newsletter. It pulled back to February’s old high and used this area for support. After drifting sideways for the week, it shot up nicely on Friday with help from the PPI number.

If we look at the options chain below, our main item of interest this week is the “Theta.” This is often referred to as “time decay” of an option. If everything else remains constant in GS, the value of our May 220 put will decrease in value by .086 per day. As option sellers, the higher the “Theta” the better.

UNP 110 - 105 May Bull Put Spread (20 contracts entered on 04/26/07)
Potential Profit $1,000.00
Union Pacific was slow and steady for us this cycle. It has left us with a comfortable cushion with only five days left until Payday. As long as it stays on track, we should be fine on this spread.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00
Consolidation talk in RTI’s sector helped it move up last week. We still have a bullish stance on its fundamentals and expect it to continue working its way back up the chart. We have plenty of time left in this spread.

As always, Trade Happy and Trade Smart

We are closely wathcing our Wynn spread today. On the chart below, you can see that we had prior support at $94.10 back in March. We wouldn’t be surprised if we see it test this prior low. Wynn is extremely oversold at these prices and once it tests this area, we expect it to bounce off it.

However, if it does not we are going to roll the position out to June. When deciding where to place the strike prices for June we look for areas of strong support. On the chart, we have support both in March and last fall. We also have a rising 200 day moving average that should provide solid support for the stock price.

IF Wynn reaches $93.99 we are going to close out our current spread and open up a June 90-85 Put Spread (below).

Trading Plan IF

WYNN falls to $93.99

CLOSING MAY WYNN BULL PUT SPREAD (20 contracts entered on 04/23/07)

Buy 20 May 95 Puts (ones we previously sold)

Sell 20 May 90 Puts (ones we previously bought)

This will be closed for a loss.

OPEN JUNE WYNN BULL PUT SPREAD (20 contracts)

Sell 20 June 90 Puts

Buy 20 June 85 Puts

This will be opened for a credit and should help offset the loss.

We suggest using market orders to get filled quickly. As always, be sure to double check your order and adjust the contract size to your original number of contracts (if you currently have less than 20 contracts).

It appears that we made it over our last hurdle in the May cycle when the FOMC left things unchanged. With less than a week and a half left in our spreads, today’s reaction to the Fed’s statement helps give us extra cushion in most of our spreads.

While we anxiously waited for the announcement, the release itself was just as we anticipated. The committee members left rates unchanged at 5.25% and changed little from their prior statement. This enabled the bulls to push the three major indices into positive territory…….again.

Even though we never want to count our money before Payday (the third Friday of the month), today’s Fed announcement was our biggest obstacle left in this cycle. With this now out of the way and the earnings season coming to an end, we are sitting in good shape! Let’s take a look to see how our spreads are sitting after today’s move………

MAY SPREADS

GOOG 450 - 440 May Bull Put Spread (10 contracts entered on 04/23/07)
Potential Profit $900.00

GOOG 500 - 510 May Bear Call Spread (10 contracts entered on 05/03/07)
Potential Profit $450.00

Google has been drifting sideways this week. It is still sitting above the 50 day moving average and has plenty of support below it. With Google now at $469.25, our put spread is 19 points below it and our call spread is 30 points above. We couldn’t be sitting much better in this spread.

WYNN 95 - 90 May Bull Put Spread (20 contracts entered on 04/23/07)
Potential Profit $1,300.00

We made it though earnings in pretty good shape. While the report was impressive, we encountered some selling the last two days. WYNN is also receiving support from its 50 day moving average. With a four-point cushion, this spread is closest to our strike price. We will continue to monitor this one closely.

GS 220 - 210 May Bull Put Spread (10 contracts entered on 04/26/07)
Potential Profit $1,700.00
Usually we get a much bigger move out of Goldman Sachs on a Fed announcement day. Even though it only moved up $1.62, that was still good news for us. We now have over a 6-point cushion with seven days left in this cycle.

On the daily chart below, you can see how GS has recovered nicely the last couple of months. With the support line that we have drawn, you can see how it has bounced off this “area” several times. At the same time, you can see how the trend-line that connects the highs has proven to be resistance for GS. While the old high back in February appears to be new support.

Keep in mind that technical analysis is an art and not a science. On this chart, there are numerous other formations that we see but many times it’s better to keep things simple. While we also use numerous indicators and oscillators when looking at charts, remember that technicals are only one part of picking a stock.

UNP 110 - 105 May Bull Put Spread (20 contracts entered on 04/26/07)
Potential Profit $1,000.00

Union Pacific has been hampered by news that last weekend’s storms have delayed its normal rail traffic. Despite this, UNP has been climbing back toward its all time high. It now feels pretty secure trading over 7 points above our strike price.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00
RTI was helped with all the consolidation news in the Basic Materials Sector. With a +4.01 move today, we now have an 8-point cushion and lots of time.

Anyone that was still in the May spread is in better shape tonight. However, you now have a difficult choice to make. You can either roll the spread like we outlined in Sunday's newsletter or you can ride it out for a few more days and see if RTI rises above your strike price. The good thing is that you now have momentum on your side. Good luck!

As always, Trade Happy and Trade Smart

It appears that we made it over our last hurdle in the May cycle when the FOMC left things unchanged. With less than a week and a half left in our spreads, today%u2019s reaction to the Fed%u2019s statement helps give us extra cushion in most of our spreads.

While we anxiously waited for the announcement, the release itself was just as we anticipated. The committee members left rates unchanged at 5.25% and changed little from their prior statement. This enabled the bulls to push the three major indices into positive territory%u2026%u2026.again.

Even though we never want to count our money before Payday (the third Friday of the month), today%u2019s Fed announcement was our biggest obstacle left in this cycle. With this now out of the way and the earnings season coming to an end, we are sitting in good shape! Let%u2019s take a look to see how our spreads are sitting after today%u2019s move%u2026%u2026%u2026

MAY SPREADS

GOOG 450 - 440 May Bull Put Spread (10 contracts entered on 04/23/07)
Potential Profit $900.00GOOG 500 - 510 May Bear Call Spread (10 contracts entered on 05/03/07)
Potential Profit $450.00
Google has been drifting sideways this week. It is still sitting above the 50 day moving average and has plenty of support below it. With Google now at $469.25, our put spread is 19 points below it and our call spread is 30 points above. We couldn%u2019t be sitting much better in this spread.

WYNN 95 - 90 May Bull Put Spread (20 contracts entered on 04/23/07)
Potential Profit $1,300.00
We made it though earnings in pretty good shape. While the report was impressive, we encountered some selling the last two days. WYNN is also receiving support from its 50 day moving average. With a four-point cushion, this spread is closest to our strike price. We will continue to monitor this one closely.

GS 220 - 210 May Bull Put Spread (10 contracts entered on 04/26/07)
Potential Profit $1,700.00
Usually we get a much bigger move out of Goldman Sachs on a Fed announcement day. Even though it only moved up $1.62, that was still good news for us. We now have over a 6-point cushion with seven days left in this cycle.

On the daily chart below, you can see how GS has recovered nicely the last couple of months. With the support line that we have drawn, you can see how it has bounced off this %u201Carea%u201D several times. At the same time, you can see how the trend-line that connects the highs has proven to be resistance for GS. While the old high back in February appears to be new support.

Keep in mind that technical analysis is an art and not a science. On this chart, there are numerous other formations that we see but many times it%u2019s better to keep things simple. While we also use numerous indicators and oscillators when looking at charts, remember that technicals are only one part of picking a stock.

UNP 110 - 105 May Bull Put Spread (20 contracts entered on 04/26/07)
Potential Profit $1,000.00
Union Pacific has been hampered by news that last weekend%u2019s storms have delayed its normal rail traffic. Despite this, UNP has been climbing back toward its all time high. It now feels pretty secure trading over 7 points above our strike price.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00
RTI was helped with all the consolidation news in the Basic Materials Sector. With a 4.01 move today, we now have an 8-point cushion and lots of time. Anyone that was still in the May spread should be sitting in excellent shape right now.

As always, Trade Happy and Trade Smart