Fed cuts again, but Market sells off. The Federal Reserve came through with another quarter-point rate cut as expected on Wednesday. Although stocks continued to climb after the release, they eventually turned hard. Despite getting the same cut as expected, the Street found the language in the statement to be a little troubling. This caused a barrage of selling, wiping out the big gains on the day and putting most stocks into the red by the time the closing bell rang.

Today's action by the Fed was its seventh straight cut in the federal funds rate. The quarter-point cut took the Fed's target rate down to 2-percent. In its statement, the Fed said that "Economic activity remains weak. Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress." The committee also signaled that we could see a pause in future cuts. Instead, the FOMC is likely to now focus on inflation pressures.

Before the tumultuous afternoon, traders were encouraged by the morning economic reports. Everyone has been talking recession, but the GDP (gross domestic product) didn't confirm this. Instead, the GDP came in at a steady 0.6-percent annual rate in the first quarter. This was a little better than expectations and was the same as the fourth quarter of last year. Although it shows that the economy is struggling, it's not a recession, which is two consecutive quarters of negative economic growth as measured by a country's GDP.

There was also an encouraging sign this morning from the payroll services firm ADP, which reported an unexpected rise in private sector employment in April. This report is considered a good indicator for the more important government jobs report that comes out on Friday. The surprising gain of 10,000 jobs versus analysts' expectations of 60,000-job loss was a very good sign.

Also on the day, the Chicago PMI (a regional manufacturing report) came in at a reading of 48.3 in April. Although any number below 50 implies weakness in the sector, today's report was slightly better than last month's.

Today's Economic Data

Oil continued its move lower on Wednesday after another large increase in U.S. supplies was announced. The Energy Information Administration reported that crude stockpiles rose by 3.8 million barrels last week. This was more than double the 1.6 million that analysts were expecting. On the session, crude dropped $2.17 and settled at $113.46, which is a key technical level on the chart. Some analysts believe that if oil stays below Wednesday's closing price, the next stop will be $110.

Despite this drop, the consumer is still taking a bath at the pump. According to the AAA, retail gas prices have set record highs for 16 days in a row. The national average price for a gallon of gasoline rose to a new record of $3.617.

It was a wild ride for the Dow Jones Industrial Average today. By the time the ride was over, the Dow finished down 11 points at 12,820. The index flirted with resistance at 13,000 but could not break through it. Instead, it pulled back sharply after touching it. This level is a strong barrier for the index along with its falling 200-day moving average (black line). The Dow is going to need a lot of momentum to make it through these two areas of strong resistance.

The S&P 500 also ran into a tough barrier at the 1,400 level on the chart. After moving above it, the index pulled back and closed down 5 points at 1,385. On the chart, it appears that we're likely to see a little more of a retracement before we take another run at the resistance levels.

The Nasdaq Composite also ran into a buzz-saw this afternoon after the FOMC's decision. It shed 13 points on the day and closed at 2,412. It closed just above an old resistance level on the chart. If it can hold above this line, this level will then become support for the index. If not, it's likely to once again be resistance for the Nasdaq in the future.

We were able to get filled in AZO on Monday, but didn't get into AAPL. We are going to adjust the strike prices, change the credit and attempt to get filled in Apple tomorrow morning. We still feel that this is a very good opportunity even at the higher strike prices. As usual with Apple, we are going to have to be patient in order to get filled in this one.

Please note: This is a Day Order. If we do not get filled, we'll make an adjustment in the future.

NEW TRADE ALERT (1)

APPLE INC (AAPL)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 155 strike price

Buy 15 May Puts at 150 strike price

Total Credit 0.40 per contract

Potential Profit $600.00

AAPL DAILY CHART

CURRENT MAY SPREADS

WYNN 80-75 MAY BULL PUT SPREAD (15 contracts entered on 04/18/08)

$80.00 per contract profit potential

After hovering at the $100 level for the last several sessions, WYNN pulled back today. The stock traded sideways for most of the session but fell hard late in the day. It gave up $3.88 and finished the day at $105.34. However, the more disturbing action was that it continued moving lower after the close after LVS reported disappointing earnings. Although WYNN moved down on low volume, it certainly wasn't a good sign when its biggest competitor missed estimates by a whopping $0.29. We currently have a cushion of 25 points in this spread. However, the company is set to announce earnings after the bell on Thursday. For now, we feel very comfortable holding it through the release. But if there's any member that feels otherwise, they can certainly close out this spread tomorrow and avoid any downside risk. If our plan changes, we'll send out an alert intraday.

RUT 650-640 MAY BULL PUT SPREAD (15 contracts entered on 04/21/08)

$50.00 per contract profit potential

The RUT also went on a wild ride today but finished near its low of the session. The index moved above the $720 resistance level earlier this week, but fell back below it today. It lost $2.75 in trading and finished the day at $716.18. Although we don't like to give up any breathing room in a spread, we're still in great shape. The index is currently sitting 66 points above our "short" strike price.

MNX 175-170 MAY BULL PUT SPREAD (15 contracts entered on 04/21/08)

$40.00 per contract profit potential

The chart on MNX looks very similar to the major indices. It looked strong earlier in the session when it was testing major resistance on the chart, but the late selling took the index well below these levels. On the day, it declined $1.59 and closed at $191.77. It's going to take some extra strength for the MNX to get above these barriers near $195.

AZO 115-110 MAY BULL PUT SPREAD (15 contracts entered on 04/28/08)

$50.00 per contract profit potential

Our AutoZone spread was probably the most painful loss today. In one session, it sliced our cushion nearly in half. It gave up $4.61, with most of it coming late in the day. With the stock trading at $120.75, we are left with a safety net of $5.75 in our bull put spread. The good news is that we still have a lot of support on the chart with its 20-day (blue line), 50-day (red line), and 200-day (black line) moving averages all above our strike prices. These should help prop the stock up if we encounter any more weakness. For now, we're going let the time tick away in this spread and see if we can get the stock price to stabilize.

As always, Trade Happy and Trade Smart

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

By adding our email address to your address book, this usually will allow our emails to get around your spam filter. If you take these steps and continue to not receive our emails, please contact our technical support department at info@incomespreadtrader.com.

Stocks managed to overcome unrelenting economic problems and climbing oil prices on Friday. The tribulations with the economy continued to pose issues for the Market last week; however, the indices overcame these troubles and finished the five days of trading in the green. When stocks can finish positive despite these concerns, it's a very good sign.

The struggling economy was at the forefront on Friday morning when the University of Michigan's report on consumer sentiment hit its worst level in 26 years. The reading of 62.6 was lower than the expected number of 63.2 and was the third consecutive month of declines.

Friday's Economic Data

The graph below shows that last month's number was a level that the report had not reached since 1992. It's really not too surprising when you consider the inflation pressures that the consumer has been forced to deal with on a daily basis.

Another press issue on Friday was the surge in oil prices, which came close to $120 a barrel on the session. The spike came after an incident took place between a vessel chartered by the U.S. military and two Iranian speedboats. Of course, additional pipeline sabotages in the oil-rich country of Nigeria didn't help matters. On the session, the price of crude gained $2.46 and settled at $118.52 a barrel on the New York Mercantile Exchange. The chart below shows the incredible run that oil has been on over the last eight months.

Besides the weak report on the consumer and high-flying oil, investors were a little shaken over the troubled earnings report from Microsoft after Thursday's closing bell. Although the company topped the analysts' predictions, it did report a drop in net income. Microsoft also issued full-year guidance that was in line with expectations. However, the stock got clobbered on the session, giving up 6.2-percent.

One good sign last week was the renewed strength in the U.S. dollar. It's no secret that the greenback has been on a downward spiral, but with talk of rate cuts coming to an end, the value of the dollar has started to improve. This is should help to fight inflation.

Friday's gain helped to keep the Dow Jones Industrial Average in the green for the week. The 42 point advance meant that the index moved up 0.03-percent for the week. With the Dow sitting at 12,891, it appears that it will soon be testing the 13,000 barrier in the near future. It also has some resistance from its 200-day moving average (black line) on the chart.

The S&P 500 showed the most strength (of the three indices) on Friday with its 0.65-percent increase. The 9-point gain helped the index finish the week up 0.5-percent. On the chart, the S&P closed just under a resistance level at 1,397. We'll be watching this resistance line closely next week.

The Nasdaq Composite wasn't as bullish as the other two indexes on Friday. Instead of finishing the day in positive territory, it lost 5 points. Despite this loss, the tech-heavy index was able to advance 0.8-percent on the week, closing at 2,422.

Last week turned out to be very good for all of our spreads. The gains across the board helped to increase the cushions in our spreads, while time decay continued to tick away at the values of the positions. The only downside last week was that we couldn't get the auto traders filled in the AutoZone spread.

On tomorrow's open, we are going back to a put spread in AutoZone Inc. for the May cycle. However, this time we are going to raise the strike prices and see if we can get filled. Although we have raised the strikes, we only have three weeks left in this cycle. We are also going to lower the credit by a nickel. We still feel very good about a put spread in AZO and last week's strength in the stock just reaffirms our original bullish feeling in the stock.

We are also placing a new bull put spread on Apple Inc. (AAPL). We've been holding off on an apple spread until after its earnings release. The company has come through once again last quarter with solid numbers. Then in typical Apple fashion, it kept its forecast very conservative. We've been long-term bulls on Apple's fundamentals for a long time. We wanted to give the stock a little time to digest the earnings news and now we feel that it's perfect timing for a put spread. With only three weeks left in the May cycle, we are still able to go nearly 20 points out of the money and place our spread at very conservative strike prices.

Please note: These are Day Orders. If we do not get filled, we'll make adjustments in the future.

NEW TRADE ALERT (2)

AUTOZONE INC (AZO)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 115 strike price

Buy 15 May Puts at 110 strike price

Total Credit 0.50 per contract

Potential Profit $750.00

APPLE INC (AAPL)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 150 strike price

Buy 15 May Puts at 145 strike price

Total Credit 0.35 per contract

Potential Profit $525.00

AZO DAILY CHART

AAPL DAILY CHART

CURRENT MAY SPREADS

WYNN 80-75 MAY BULL PUT SPREAD (15 contracts entered on 04/18/08)

$80.00 per contract profit potential

After three strong days last week, WYNN lost ground on Friday. It shed $1.84 on the session and finished the week at $108.01. Last week's gains took WYNN above its 50-day moving average on the chart (red line). However, the stock has run into a resistance barrier near $110. Heading into this week, our main goal is to have a large cushion in advance of WYNN's earnings release on Thursday. Currently, we have 28 points of breathing room in this spread.

RUT 650-640 MAY BULL PUT SPREAD (15 contracts entered on 04/21/08)

$50.00 per contract profit potential

The RUT had a nice finish on Friday when it closed near its high of the session. On the day, it gained $4.81 and finished the week at $721.88. It is once again sitting at a resistance level on the chart. We'll be watching this level very closely this week. We would like to see it break firmly above this line and then continue advancing up the chart. With the RUT trading 71 points over our "short" strike price, we're sitting in very good shape in this spread.

MNX 175-170 MAY BULL PUT SPREAD (15 contracts entered on 04/21/08)

$40.00 per contract profit potential

Although the MNX finished the session in the red, it was certainly well off its lows of the session. The $0.60 loss on Friday took the index down to $191.86. This leaves the RUT nearly 17 points above our put spread with just three weeks left in the May options cycle. The next area of resistance on the chart appears to be in the area of $195.

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

By adding our email address to your address book, this usually will allow our emails to get around your spam filter. If you take these steps and continue to not receive our emails, please contact our technical support department at info@incomespreadtrader.com.

Today's action made it difficult to get filled in our AZO spread. Due to this, we are going to send the same order back to the auto trade brokers tomorrow morning with the same credit. Let's use patience and see if we can get filled.

Please note: This is a Day Order. If we do not get filled, we'll make adjustments in the future.

NEW TRADE ALERT (1)

AUTOZONE INC (AZO)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 110 strike price

Buy 15 May Puts at 105 strike price

Total Credit 0.55 per contract

Potential Profit $825.00

Stocks rebound after sluggish start to the week. With little news on the economic front this week, all eyes have been focused on the earnings. This morning's report from Dow giant Boeing helped move the Market into the green. Tech also received a boost from a couple of chip makers that helped move the Nasdaq higher.

So far this earnings season, international business has been the catalyst behind many of the good reports, General Electric not withstanding. Today's release by Boeing fit the bill with its strong multinational business. The second largest aerospace company handily beat expectations with its net income climbing 38-percent. The company also reiterated its strong forecast for the rest of the year and 2009.

However, it wasn't all good news on the day. The credit markets came back into the forefront when bond insurer Ambac reported a dismal first quarter. The stock fell 43-percent after the company announced $1.73 billion in collateralized-debt-obligation losses and $1.04 billion in loss provisions. This news put a damper on things as it reminded traders of the recent problems in the financial sector. It wasn't surprising to see Ambac or rival MBIA lead the list of worst performers on the day.

NYSE Biggest Percentage Decliners

Early in the session on Wednesday it looked as if we were finally going to get some relief in the price of oil. The government's weekly oil inventory report showed an unexpectedly large rise in supplies. But this did little to prevent crude from rising for the fourth straight session. It wasn't U.S. supplies, but rather international concerns that stoked the price of crude to move up $0.23 and close at $118.30 a barrel. The fear was flamed by the 170,000 barrels of daily production that remains off-line in Nigeria due to a pipeline attack earlier this week. In addition to this, BP PLC is also considering shutting down its production of 700,000 barrels a day if a strike continues at a U.K. refinery.

After two straight days in the red, the Dow Jones Industrial Average reversed that trend with a 42-point gain on Wednesday. The 0.34-percent move higher took the index up to 12,763. It's nice to see the index in smaller trading range this week. We wouldn't mind if this continued.

The S&P 500 also edged up with a 3-point advance on Wednesday. The 0.29-percent move keeps the index at last week's high at 1,379.

The Nasdaq Composite has been the strongest of the three this week. It also had the most strength today when it moved up 1.19-percent and closed at 2,405. The 28-point gain moves the index back to a resistance level that it has been attempting to break through on the chart. We will be closely monitoring this level in the next few sessions to see if it can move above it and stay there.

After the closing bell today, a couple of Nasdaq heavyweights reported earnings. Both Apple and Amazon reported very good numbers, but traders were concerned that margins could be compressing in the upcoming quarters. Both of them fell in after hours trading, but Apple was able to climb back near its closing price.

So far....so good ..... for our spreads. The slight pullback earlier this week and gains today left us in good shape heading into the end of the week. The ideal trading environment for spread trading is slight moves in either direction. Of course, we wouldn't mind a big move heading north, but let's not get greedy. With three May positions, it's time to add another one.

On tomorrow's open, we are going back to a put spread in AutoZone Inc. for the May cycle. As many of you know, we've been bullish on AZO for a while. To add to our bullish fundamental stance on AZO, we've noticed a lot of insider buying. As a matter of fact, Eddie Lampert, its biggest shareholder spent $94 million to top off his stake in the company. We also like the chart on AZO. It has broken above its 200-day moving average (black line) and held. In addition, any days of selling have been light volume. This is very important to see on any pullbacks. Let's make it two straight months of profits in AZO.

Please note: This is a Day Order. If we do not get filled, we'll make adjustments in the future.

NEW TRADE ALERT (1)

AUTOZONE INC (AZO)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 110 strike price

Buy 15 May Puts at 105 strike price

Total Credit 0.55 per contract

Potential Profit $825.00

AZO DAILY CHART

CURRENT MAY SPREADS

WYNN 80-75 MAY BULL PUT SPREAD (15 contracts entered on 04/18/08)

$80.00 per contract profit potential

News that Macau is enforcing a moratorium on new casino licenses and freezing land allocations for new casino developments sent the gaming sector screaming higher on Tuesday. This move is giving the current operators nearly a monopoly in the Chinese territory. To put this in perspective, in the first quarter of this year, gaming revenues in Macau hit $3.72 billion, which is more than the Las Vegas Strip and Atlantic City's revenues combined.

WYNN followed yesterday's strong move with another $3.31 gain on Wednesday. With the stock sitting at $105.95, we have nearly a 26-point cushion in this spread. However, we have another big hurdle to get over on May 1st when WYNN has its earnings announcement. We would like to have a similar cushion in our spread at that time. For now, let's sit tight and see where the stock goes from here.

 RUT 80-75 MAY BULL PUT SPREAD (15 contracts entered on 04/21/08)

$50.00 per contract profit potential

As expected, RUT has traded in a similar pattern to the major indices this week. It lost ground on the first two days, but recovered nicely today. It advanced $4.40 and finished the session at $708.11. On the chart, it closed just above its 20-day moving average (blue line) and well above its 50-day moving average (red line), which offers another support level for the index. We are sitting comfortably in this spread with nearly 30 points of breathing room.

MNX 175-170 MAY BULL PUT SPREAD (15 contracts entered on 04/21/08)

$40.00 per contract profit potential

We mentioned for some time that we have a more bullish stance on the Nasdaq than the other main indexes. The MNX has lived up to those expectations as it has been performing very well so far this week. In today's trading, the MNX moved up $2.50 and closed at $190.67. This leaves our put spread in very good shape with the MNX sitting 15 points over our "short" strike price.

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

By adding our email address to your address book, this usually will allow our emails to get around your spam filter. If you take these steps and continue to not receive our emails, please contact our technical support department at info@incomespreadtrader.com.

Stocks surge after earnings continue to come in better-than-expected. With the earnings-bar set at low levels, companies with even poor results have been able to overachieve. This has been enough to ignite a rally in the indexes. Any sign that the worst is behind seems to be what the Street has been looking for. On the other hand, any additional problems in the credit market could easily take us down with the same velocity.

Friday's spark came from Citigroup's earnings report, which was weak but not as bad as the Street was predicting. The firm's $13 billion write-down led to a loss on the quarter. However, the stock surged 4.5% on Friday, even though it took a $5.11 billion loss for the first quarter. We saw this same pattern in the financial sector last week with both Merrill Lynch and J.P. Morgan. Chase also announced massive write-downs but saw their stocks rally when the results came in better than the Street feared.

It was a broad range of companies that helped push stocks higher across the board. Index heavyweights Google, Caterpillar, and Honeywell all turned in good numbers. Google's online advertising remained strong and Caterpillar and Honeywell relied on strong international business to pad its bottom line.

The end to the week was a drastic contrast from a week earlier when General Electric caused a round of panic selling. The GE earnings miss brought out the doomsayers last Friday. Perhaps it was all the worst-case scenario talk at the end of last week that helped lower the bar this week. When those fears weren't realized, the shorts wanted to run for the hills and the buyers wanted to pick up some bargains.

The dollar strengthened at the end of the week. It rose against the yen and the euro. Meanwhile, oil once again hit a new record with a $1.83 gain, taking it up to $116.69 a barrel on the New York Mercantile Exchange.

After a sluggish start to last week, the Dow Jones Industrial Average moved up four days in a row. It finished the week with a 228.87 point rally on Friday. The 1.8% move puts the index at a place that it hasn't been since the beginning of the year. However, it remains down 3.1% for the year. The index finished the session just below a resistance level at 14,000 and its 200-day moving average (black line).

The S&P 500 also turned in stellar performance last week. It capped off the five day stretch with a 1.8% gain on Friday. The 24-point advance puts the index at 1,390, which is just below a resistance level at 1,400.

The tech-laden Nasdaq Composite Index shot up 2.6% on Friday. The 61-point advance took the index up to 2,402. Despite the huge gains last week, it remains the weakest index on the year. The Nasdaq is still off 9.4% for 2008.

We had one concern on our mind heading into last week.....WYNN. Unfortunately, that concern didn't go away. In Wednesday's newsletter we talked about our "Max Pain" indicator that is usually very good the last week of the options cycle. This was still giving us a good indication on Thursday and Friday.

The option chain below is from WYNN on Wednesday. However, on Thursday, the Max Pain indicator was still giving the indication that the stock was going to end up above $95 but below $100. The $95 strike price had even higher open interest on Friday (2.9K) than it did on Wednesday and Thursday. On the other hand, there were a lot of traders selling the $100 calls on WYNN the last week of the April cycle.

Although this indicator was telling us that the stock was going to end up above our "short" strike price of $95, we started to take on a lot of pain. As many of you know, we don't like to let a stock move in-the-money that close to expiration. It just is not worth the risk. Due to this, we closed out our April spread and then opened up a new May put spread at lower strike prices. Option traders call this defensive move a "rollover."

In this instance, we decided to do a rollover instead of just closing out the original spread. We did this for a number of reasons. First off, we felt that this move lower in WYNN was temporary and will be short-lived. We firmly believe that the fundamentals in WYNN justify a much higher stock price. With the decline last week, it gave us an opportunity to open up a new spread at very conservative strike prices. This also allowed us to take advantage of the price decline and spike in implied volatility in Thursday's session. When you consider all of these factors, we believe that it gives us a high probability of success in this trade. The only downside is that it ties up our money in WYNN for another month and we have to hold over an earnings announcement. However, we feel extremely confident in this trade. Let's take a look at all of our April spreads in detail...............

EXPIRED/CLOSED APRIL SPREADS

MNX 165-160 APRIL BULL PUT SPREAD (15 contracts entered on 03/26/08)

$50.00 per contract profit

WYNN 95-90 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$100.00 per contract loss * Does not include new May spread with $1,200 profit potential

AZO 105-100 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$40.00 per contract profit

RUT 610-600 APRIL BULL PUT SPREAD (10 contracts entered on 03/28/08)

$45.00 per contract profit

With April now done, it's time to get things rolling for May. Once again, we're going to get the month started with two index spreads.

The first one is going to be a bull put spread on the Russell 2000 Index (RUT). We've had three straight profitable months in this spread and believe that it's setting up for another good trade for May. The index is sitting at the upper end of its trading range, but we believe that it will continue breaking through resistance on the way up. It certainly has done this the past month and a half and has picked up bullish momentum. However, we are placing our strike prices at very conservative levels in case there are any downside surprises in the next four weeks. By taking in a little less credit and going farther out of the money, we are able to enter a put spread near its trading low of the year. This should help us make it four straight profitable months in the RUT.

Our second spread is also a repeat from last month. We are placing a Bull Put Spread on Mini-Nasdaq100 Index (MNX). This is another one that we are able to come in at conservative strike prices for a decent credit. Although we're not able to go at the low of the year, we are able to enter a spread under very good support levels on the chart. The Nasdaq has been suffering the most on the year, but we believe that it will spring back with more conviction in the near-term. With this in mind, we are moving forward with a very good trade in the MNX.

Please note: These are Day Orders. If we do not get filled, we'll make adjustments in the future.

NEW TRADE ALERT (2)

Russell 2000 Index (RUT)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 650 strike price

Buy 15 May Puts at 640 strike price

Total Credit 0.50 per contract

Potential Profit $750.00

Mini-Nasdaq100 Index (MNX)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 175 strike price

Buy 15 May Puts at 170 strike price

Total Credit 0.40 per contract

Potential Profit $600.00

RUT DAILY CHART

MNX DAILY CHART

CURRENT MAY SPREADS

WYNN 80-75 MAY BULL PUT SPREAD (15 contracts entered on 04/18/08)

$80.00 per contract profit potential

We mentioned earlier in the newsletter the reasons why we entered the May Bull Put Spread on WYNN. Below is a weekly chart of the stock. In order for it to reach our strike prices, WYNN would need to fall to a level that it hasn't been since 2006. Fundamentally, there is no reason that it should be anywhere close to these levels. Technically, there is also plenty of support on the chart that should help keep the stock above our spread. With the stock closing at $98.46 on Friday, we have an $18.46 cushion in this spread.

As always, Trade Happy and Trade Smart

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

By adding our email address to your address book, this usually will allow our emails to get around your spam filter. If you take these steps and continue to not receive our emails, please contact our technical support department at info@incomespreadtrader.com.

WYNN has continued to fall and is pressuring our April Bull Put Spread. Due to this, we are going to close our 95-90 April Bull Put Spread. Then we are going to open up a new May Bull Put Spread at lower strike prices.

Please note: the closing out of the current spread will apply to only those members in this position. The new spread will apply to all members.

WYNN TRADE ALERT

Step # 1

WYNN RESORTS LTD (WYNN)

CLOSING APRIL BULL PUT SPREAD (15 contracts)

Buy 15 April Puts at 95 strike price (puts we previously sold)

Sell 15 April Puts at 90 strike price (puts we previously bought)

We suggest using a Market Order to get filled quickly.

Step # 2

WYNN RESORTS LTD (WYNN)

OPENING MAY BULL PUT SPREAD (15 contracts)

Sell 15 May Puts at 80 strike price

Buy 15 May Puts at 75 strike price

We suggest using a Market Order to get filled quickly.

Stocks soar after earnings data provides a sense of relief. Traders looked past dismal inflation and housing reports this morning after corporate earnings came in better-than-expected. The quarterly results from Market giants helped relieve a lot of investors' fears from last week after GE shocked the Street with its dismal earnings. Today's trading had a sense of relief that GE was not a barometer for stocks overall and that perhaps most of the credit-related issues are close to being over.

Perhaps the most amazing aspect of today's earnings was that it was from a broad range of companies. The beaten-down financial sector was relieved after JPMorgan Chase & Co. beat expectations, even though its profit fell by 50 percent. Then Wells Fargo announced over $326 million in mortgage-related write downs, but gave a very good forecast. Meanwhile, Coca-Cola Co. showed strong numbers due to its international business. Tech also got into the swing of things when Intel Corp. beat first-quarter estimates.

Today's surge was quite remarkable considering the government's data on inflation. As expected, consumer prices rose by 0.3 percent in March. This comes after being unchanged in February. Meanwhile, core inflation, which excludes food and energy, rose 0.2 percent in March. This brings the annualized rate of core inflation to 2.4 percent, a number that is above the 2.0 percent comfort zone of the Federal Reserve. Although both of these numbers (CPI and core CPI) are troubling signs for the economy, they were in line with analysts' expectations.

It also wasn't a shocker when this morning's report on new home construction showed a 12 percent drop. According to the Commerce Department, housing starts fell to its lowest level in 17 years.

This afternoon, the Fed's beige book was released. It showed a weakening U.S. economy in March due to a slowdown in consumer spending and businesses facing higher costs. The report is released about eight times a year and is a summary of economic activity prepared with data from the Fed's 12 district banks.

The price of crude made another all-time high today when it settled just below $115 a barrel. Today's rally was caused by supply fears after the government's weekly report on inventories showed a big drawdown in gasoline and refining. Of course, the weak dollar didn't help matters.  On the session, crude closed up $1.14 at $114.93 a barrel.

FRIDAY'S ECONOMIC DATA

The Dow Jones Industrial Average climbed 256 points in today's session, finishing the session at 12,619. The 2 percent one-day gain pushed the index back above its 50-day moving average (red line) and towards last week's high on the chart.

The S&P 500 also shot back above its 50-day moving average (red line) with its 30-point move to the upside. The 2.27 percent gain put the financial-heavy index at 1,364 when the closing bell rang.

The Nasdaq Composite gapped higher on the open and then continued to run up the chart. It finished the day up 64 points at 2,350. The next resistance barrier on the chart is in the area of 2,400.

We headed into this week with one concern on our mind.....WYNN. The first two trading days of the week did little to ease this pressure, but today's action helped alleviate it. The strong surge helped give us back our breathing room in this spread while nearly locking the rest of our profits in the bank. We'll continue to monitor WYNN closely over the next two sessions, but there's one indicator that's adding to our confidence.

When we look at the WYNN option chains, we get some insight into what the "big money" is up to by looking at the open interest at certain strike prices. This is an extremely valuable indicator that we use during expiration week. Many traders call this "Max Pain."

This comes from the theory of Maximum Pain, which states that most traders who buy and hold options until they expire will lose money. What exactly does this mean? The important thing to remember is that professionals are the ones that can move stocks. At the same time, the professionals are the ones that sell options and they don't want to sell contracts that are going to end up in-the-money at expiration.

With this in mind, if we look at the options chain for WYNN (below), the professionals are going to want the stock to end up at a strike price above the majority of open interest. Remember, they are the ones selling the puts, so they don't want be wrong and have to end up paying out for the puts that they sold.

On the WYNN chain, there is a ton of open interest at the $95, $90, and $85 strike prices. However, the largest amount of open interest is sitting at our $95 strike price. This would lead us to believe that the stock will be above this at the closing bell on Friday. Now there are other factors that could trump this, like drastic selling in the indices or stock specific news, but this is a very good indicator at the end of the options cycle. This is one reason why we were willing to hold this position even when the stock was hovering just above our $95 strike price the past couple of days. When we have this factor working in our favor, we're going to give the stock a little longer leash.

After today's closing bell, the earnings momentum continued with IBM and EBAY. Both announced solid earnings reports. More impressive was the future guidance that both provided. Tomorrow will once again be action packed with the next wave of corporate earnings. Hopefully the string of good news will continue.

CURRENT APRIL SPREADS

MNX 165-160 APRIL BULL PUT SPREAD (15 contracts entered on 03/26/08)

$50.00 per contract profit potential

The MNX tested its 50-day moving average (red line) yesterday, then moved sharply higher today. It climbed $5.22 and finished the session at $184.69. Today's trading gives us almost 20 points of breathing room in this spread with not a lot of time left. However, we'll still be watching this spread closely to see if it can break through the resistance levels on the chart. If it does, it could make another excellent spread next month.

WYNN 95-90 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$55.00 per contract profit potential

After eight straight sessions in the red, WYNN finally rallied. But it didn't reverse until it was well below yesterday's candle on the chart. Some of the toughest trades are when a stock is moving lower without any news. In WYNN's case, there hasn't been any "new" news on the stock. Instead, there's only regurgitated reports about a competitor's layoffs. Evidently it's guilt by association. The Street appears to be anticipating weakness in the industry numbers by this news and is taking it off on all of the gaming stocks.

In our opinion, WYNN is definitely the strongest in the sector. It led the way in today's trading with a $2.07 gain, taking the stock up to $100.13. This gives us a $5.13 cushion with two sessions left in the cycle. We'll continue to monitor this one closely and send out an alert if any action is needed.

AZO 105-100 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$40.00 per contract profit potential

In Sunday's newsletter, we pointed out the triangle formation that we saw in AutoZone with our thought of a break to the upside. That's exactly what we got today. The stock shot through the upward resistance on the pattern with its $2.16 gain. This took it through its 200-day moving average (black line) on the chart. There is a strong likelihood that the stock will continue to run now that's broken out of this pattern. Due to this, don't be surprised if we come back with another put spread in May.

RUT 610-600 APRIL BULL PUT SPREAD (10 contracts entered on 03/28/08)

$45.00 per contract profit potential

Too bad they couldn't all be this easy. This spread has been nothing but auto pilot this month. We entered this spread with a big cushion and it looks to be going out with an even larger one. Today's 21-point gain gives us over 100 points of comfort in this spread. It appears that we can lock this one in the bank.

As always, Trade Happy and Trade Smart

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

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Stocks plummet after disastrous earnings from Dow giant and troubling consumer sentiment reading. Traders couldn't shake off these startling reports on Friday morning, which caused a barrage of selling up until the closing bell.

Things got ugly Friday morning when the conglomerate General Electric shocked the Street with its startling-weak earnings report that showed a profit decline of 6-percent from a year earlier. This came less than a month after the CEO Jeff Immelt told analysts that the conglomerate would outperform the Standard & Poor's 500 Index this year and reassured investors that the company was on pace to hit its numbers. The company not only missed its numbers, it also cut its 2008 earnings outlook. Immelt blamed the financial services deterioration in late March due to the near-collapse of Bear Stearns. The company also said the quarter's weak results were due to the continued shutdown of a Salt Lake City medical manufacturer that contributed to a 17 percent decline in its health care business.

The report simply showed us incompetence in the CEO position. There's one thing that the Street does not take well, and that's negative surprises. This should have been crystal clear to Immelt, who could have warned analysts instead of pumping up his stock over the last quarter. Goldman Sachs analyst Dean Dray downgraded GE shares to neutral, saying in an investor note that he expects the "magnitude and timing of GE's miss and sharply lower 2008 guidance to shake investor confidence" and that it "raises credibility concerns for GE."

Investors dumped GE stock on Friday like it was going out of style. It gapped lower and finished the session down 12.79-percent.

The economic data on Friday didn't help matters. The University of Michigan's index of consumer sentiment fell to the worst reading since 1982. This month's 63.2 number was down dramatically from the 69.5 recorded in March.

FRIDAY'S ECONOMIC DATA

Monday's economic data will focus on consumer spending when the retail sales are announced. But the biggest numbers will be released on Tuesday with the Producer Price Index (PPI) and Wednesday's Consumer Price Index (CPI). Also this week, the world's largest banks and brokerage firms will announce earnings. They will tell us just how painful the last quarter has been and if there's any light at the end of the tunnel.

The price of crude finally took a breather on Friday. It only ticked up $0.03, closing at $110.14 a barrel on the New York Mercantile Exchange. This was due to the International Energy Agency cutting its oil-demand growth forecast by 460,000 barrels a day, which was the largest downward revision in seven years. Even with Friday's small move up, oil gained 3.7% for the week and remains at record levels.

By the end of the session, the Dow Jones Industrial Average had lost 2.04-percent. The 256-point loss took the index down to 12,325. On the chart, it broke through key support levels and closed just below its 50-day moving average (red line). We would like to see it bounce back above this line early in the week. If not, the next support level is 12,200.

The S&P 500 also broke through its 50-day moving average (red line) in its 27-point free-fall. The 2.04-percent loss on Friday took the index down to 1,332. For the week, the index was down 2.7%. 

The Nasdaq Composite got whacked the hardest on Friday when it gave up 2.72%. The 61-point tumble puts the index at 2,290. The index closed just below its 50-day moving average (red line) on the chart. If it can not break back above this line, it could head lower to the next support level at 2,250.

From start to finish on Friday, it was ugly. However, one of our spreads finished the session in the green. Heading into this week, we'll probably see some left-over selling at the open on Monday morning. The key is after that initial selling, can the indexes stabilize. If so, then we have something to build on. If not, get your hardhat on and watch out for falling debris. We have a few excellent factors working in our favor this week.

First off, we only have five trading days left in the April options cycle. Time is on our side. The other advantage is that we have some decent cushions in all of our spreads. The only one that has us a little concerned at the present is our WYNN position. Friday took a big bite out of our breathing room in this spread. We still have close to an 8-point cushion, but will be monitoring this one closely. For now, let's take a look at all of our spreads in detail...............

CURRENT APRIL SPREADS

MNX 165-160 APRIL BULL PUT SPREAD (15 contracts entered on 03/26/08)

$50.00 per contract profit potential

As expected, it was an ugly session for the MNX. It fell $5.43 on Friday and finished the week at $179.87. Even with the 2.93-percent loss, we're still sitting in great shape in this spread. We have nearly 15-points of breathing room and multiple support levels on the chart. We should be able to make it to the finish line with our spread intact.

WYNN 95-90 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$55.00 per contract profit potential

Last week was a painful 5-day stretch for our WYNN spread. The stock moved lower each session, finishing the week with a 5.12-point drop on Friday. This took it down to $102.85, which is $7.85 above our "short" strike price. Although this is still a decent cushion, it's the trend that has us concerned. We still have three good support levels that should help, but we would like to see some stabilization in the stock on Monday. We plan on keeping this one on a tight leash this week.

AZO 105-100 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$40.00 per contract profit potential

AutoZone finished the week with two straight positive sessions. Considering the overall Market weakness on Friday, it was amazing that AZO moved up $0.35. On the chart, it moved back above its 50-day moving average (red line). It also has been forming a triangle pattern, which suggests that it will break big in either direction. This is also confirmed by the 200-day moving average (black line) and 50-day moving average converging. Based on its recent price action, we believe that it will break up. However, it could be anywhere from a few sessions to a few weeks before this happens. With the stock sitting at $116.96, we should be able to coast to the finish line in this spread.

RUT 610-600 APRIL BULL PUT SPREAD (10 contracts entered on 03/28/08)

$45.00 per contract profit potential

The RUT plummeted 19.26 points on Friday, taking it below its 50-day moving average (red line) on the chart. Despite this drop, the index remains 78 points above our spread at $688.16. If the index continues to fall, we have plenty of support levels that should help us. The next one is sitting at $680. With only five sessions left, we should be able to ride this one out comfortably.

As always, Trade Happy and Trade Smart

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

By adding our email address to your address book, this usually will allow our emails to get around your spam filter. If you take these steps and continue to not receive our emails, please contact our technical support department at info@incomespreadtrader.com.

Stocks tumble as oil hits new highs. The indices finish the session in the red after oil makes another new all-time high and corporate earnings come under scrutiny.

The price of crude spiked to another all-time high on Wednesday after an unexpected decline in inventories was announced. The government's weekly EIA (Energy Information Agency) reported a surprising 3.2 million barrel drawdown in inventories last week. This was drastically lower than the increase of 2.4 million barrels that analysts were expecting.

Analysts were also wrong on their gasoline forecasts. Instead of a drop of 2.3 million barrels that the Street was expecting, the EIA announced a decline of 3.4 million barrels. This came on the same day that the AAA announced that the average gasoline prices nationwide hit a new record high of $3.343 at the pump. The price of crude finished the session up $2.37 to $110.87 a barrel.

The higher oil prices caused shipping giant United Parcel Service (UPS) to trim its forecasts. The company claimed that the weak economy and higher fuel costs were negatively impacting the company, causing it to lower first quarter earnings expectations by 10-percent.

As if there weren't enough negative sentiment floating around, the International Monetary Fund (IMF) decided to add to it today. It projected that the U.S. economy will fall into a recession this year, while giving the world economy a 25-percent chance at entering one.

The IMF has three main roles in the global monetary system. It surveys and monitors economic and financial developments, lends to countries with balance-of-payment difficulties, and provides assistance and training for countries requesting funds.  

Talk of write-downs once again reared its ugly head on Wednesday. CNBC reported that Merrill Lynch is going to have additional first quarter write-downs of between $6 billion to $6.5 billion. However, this is not completely based on subprime loans. Instead, much of it is tied to commercial real-estate exposure and other loans. To date, the company has already written down $24 billion.

It wasn't all bad news on the earnings front on Wednesday. Circuit City announced that it turned a profit for the fiscal fourth quarter. This was despite a drop in same-store sales over the period. Analysts seemed pleased with the comments from the company that suggested the worst might be over for the troubled retailer. Despite this, the stock moved lower on the session.

WEDNESDAY'S ECONOMIC DATA

Most of the Street's focus will be on the first-quarter earnings reports. With the crumbling economy and stock prices beaten-up across the board, expectations have certainly been lowered. According to Thomson Financial, S&P 500 companies are expected to decline by more than 12% in the first quarter. This is dramatically lower than the gain of nearly 6% that was predicted at the beginning of the quarter. However, the majority traders will be concentrating on the corporate outlooks and forecasts for any indication that the worst is behind us.

The Dow Jones Industrial Average made a slight rally in the last hour of trading, finishing the day down 49 points. The index closed at 12,527, which is just above a support level on the chart. If it can bounce off this support level, it should be turned back to the upside.

The S&P 500 also struggled on the session. It lost 11 points and finished the day at 1,354. On the chart, its next support level is around the same area as its 50-day moving average (red line). For the last several weeks, the index has been stepping up the chart nicely. We would like to see the index continue this pattern. 

The Nasdaq Composite was hit the hardest today with a 1.13% decline. The tech-laden index tumbled 26 points lower and finished the session at 2,322. On the chart, it has a support level along with its 50-day moving average (red line) just below Wednesday's low. We'll be looking for the index to reverse at this level.

With all four positions being put spreads this cycle, we certainly don't enjoy down days. However, Wednesday's losses were quite mild compared to some of the declines over the last few months. Of course, it's always easier on down-days when we are sitting with such large cushions in our spreads. With only a week and a half remaining in the April options cycle, we're currently sitting in great shape. Let's take a look at all of our spreads in detail...............

CURRENT APRIL SPREADS

MNX 165-160 APRIL BULL PUT SPREAD (15 contracts entered on 03/26/08)

$50.00 per contract profit potential

The MNX fared similar to the Nasdaq today with its 1.08% fall on the day. The $1.99 decline puts the index at $182.62. This still leaves us with plenty of breathing room in our put spread. On the chart, the MNX has good support at the $180 mark. However, if it breaks below this level, we still have plenty of other support levels that should help keep it above our strike prices. Let's sit back and enjoy this one for now.

WYNN 95-90 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$55.00 per contract profit potential

The gaming stocks were down across the board due to an investment issue at MGM. Evidently Dubai World is holding off on its plan to take a larger stake in MGM, despite receiving approval from regulators. It didn't help matters when another operator received a downgrade from an analyst. On the session, WYNN fell $1.89 to $108.83. This reduces our margin for error in this spread, but we still have close to a 14-point cushion and several good support levels on the chart.

AZO 105-100 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$40.00 per contract profit potential

AutoZone also had a rough session. It lost $1.50 and settled below its 50-day moving average (red line) at $114.44. Since running up against its 200-day moving average (black line) on the chart, AZO has been steadily falling. The good news is that we still have plenty of space between the stock and our "short" strike price. We also have good support levels on the chart that should help us make it to the finish line in this spread.

RUT 610-600 APRIL BULL PUT SPREAD (10 contracts entered on 03/28/08)

$45.00 per contract profit potential

The RUT tumbled nearly 2% in today's trading. The good news is that it could almost lose the same number of points every day for the next week and a half and we would still finish with a profit in this spread. On the chart, the RUT has a very good support level at $685, which is the same area as its 50-day moving average (red line). This should help to strengthen this support and would be a likely reversal area for the index. We should be able to enjoy the final seven sessions in this spread.

As always, Trade Happy and Trade Smart

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

By adding our email address to your address book, this usually will allow our emails to get around your spam filter. If you take these steps and continue to not receive our emails, please contact our technical support department at info@incomespreadtrader.com.

Stocks shrugged-off a troubling jobs report and finished the session mixed. The non-farm payroll report came in worse than expected on Friday, the worst in five years. But instead of taking the major indexes lower, two out of the three were able to finish the day in the green, capping a week of solid gains.

The Labor Department's data showed an 80,000-job loss in March, which was much larger than the 50,000 loss that analysts were expecting. In addition, the government revised the losses in January and February to a negative 76,000. The March job-loss marked the third straight decline in U.S. payrolls. With the data now in for the first quarter of 2008, payrolls fell by a total of 232,000 jobs, which is a drastic turnaround from the 241,000 gained during the fourth quarter in 2007.

Meanwhile, the jobless rate moved up to 5.1% from 4.8% in February. This is at the highest level since September of 2005.

FRIDAY'S ECONOMIC DATA

The job losses were fairly evenly spread across the board. The hardest hit industries were the builders and factories. Construction companies shed 51,000 jobs while factory payrolls took a 48,000 cut from the previous month.

As expected, the labor market continued to weaken, in step with the overall economy. The positive news is that the Market took this very bearish data with ease. Traders acted as if it were time to put this data behind us. The question now is whether the data continues to weaken or if we can somehow turn the corner. Only a crystal ball could answer that question.

The U.S. dollar continued to show weakness on Friday. It fell against the euro and caused commodities to rise. Crude moved up another $2.28 to $106.11 a barrel. Also, gold futures climbed $8.10 to $917.70 per ounce.

The Dow Jones Industrial Average was the lone index in the red on Friday. It lost 16 points and finished the session at 12,609. However, it posted solid gains on the week, closing up 3.2% for the last five trading days. On the chart, the next area of resistance is just below 12,800.

The S&P 500 was able to move up 1.09 points on Friday and finish the session at 1,370. It also posted solid gains on the week with its 4.2% move to the upside. Last week, it was able to break above its 50-day moving average (red line) and has been pressuring resistance levels on the chart. 

The Nasdaq Composite was the strongest performer on Friday. It moved up 7.68 points or 0.32% to finish the session at 2,370. It also had the largest advance on the week with a 4.9% gain.

It was another good week for our spreads. Although we weren't able to get filled in our Apple spread, the rest of our positions moved in the right direction. This helped increase our cushions and give us plenty of breathing room heading into the final two weeks of the April options cycle.

Heading into this week, the focus will be on company earnings. With expectations already very low, any weakness in them shouldn't weigh too heavily on the indices. However, any upside surprises could easily propel stocks higher. This is one advantage of a Market that has been beaten up over the first quarter. For now, let's take a look at all of our spreads in detail...........

CURRENT APRIL SPREADS

MNX 165-160 APRIL BULL PUT SPREAD (15 contracts entered on 03/26/08)

$50.00 per contract profit potential

The MNX capped off its week with another nice move to the upside. The index gained $1.07 on Friday and finished the week at $186.59. With the Nasdaq leading the other indices up the chart, it has left our MNX spread in very good shape. With only two weeks to go in the cycle, we have over 20 points of breathing room in this spread.

WYNN 95-90 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$55.00 per contract profit potential

Our WYNN spread was the one that gave us the biggest sigh of relief last week. After testing support at $100, it took off like a rocket. Even though it took a breather on Friday, it still gave us an outstanding week. The stock was hurt on Friday when an analyst said trends in (Las Vegas) room rates were soft in the first quarter. On the day, WYNN lost $3.56. However, with the stock sitting at $112.87, it remains $17.87 above our put spread.

AZO 105-100 APRIL BULL PUT SPREAD (15 contracts entered on 03/27/08)

$40.00 per contract profit potential

AutoZone also had an outstanding week. Although it slipped $0.80 on Friday, it finished the week well above our strike prices at $116.98. On the chart, the stock is sandwiched between its 200-day moving average (black line) and its 50-day moving average (red line). Due to its recent price action, we are anticipating that it will break-through its 200-day moving average with some decent momentum. This would be perfect for our put spread. If not, we have several solid support levels above our position.

RUT 610-600 APRIL BULL PUT SPREAD (10 contracts entered on 03/28/08)

$45.00 per contract profit potential

We're not sure if we could be sitting much better in our RUT spread. The index keeps on expanding our cushion on its march up the chart. On Friday, it tested resistance on the chart near $720, but wasn't able to break through. Instead, it closed off its highs at $713.73. Nonetheless, it gives us a comfortable $103.73 cushion heading into the final two weeks of trading. Too bad they couldn't all be this good.

As always, Trade Happy and Trade Smart

ARE YOU NOT RECEIVNG NEWSLETTERS CONSISTENTLY?

We publish our weekly newsletters on Sunday and Wednesday evenings. They are then sent out via email and posted on our website. We also send out trade alerts and supplemental newsletters as needed. If you are not receiving these newsletters or trade alerts consistently, we suggest you take the following steps.

1. Check your spam folder for our emails.

2. Add info@incomespreadtrader.com to your email address book.

By adding our email address to your address book, this usually will allow our emails to get around your spam filter. If you take these steps and continue to not receive our emails, please contact our technical support department at info@incomespreadtrader.com.