Trade Alert

Here's something for investors beaten down by the market's sharp declines this spring: The Dow Jones industrial average just had its best two weeks since November.

  The Dow's gain of 16 points on Friday was relatively modest, but it capped a surge of 5.2 percent over the past two weeks that puts the average nearly halfway back to the high for the year that it reached on April 26.

  Stocks had a longer winning streak earlier this year, an eight-week stretch that ended in late April, but those gains were more gradual. Then a sharp drop in May and early June brought the Dow down as much as 12.4 percent below its 2010 high, a decline that market analysts call a "correction."

  The debate now is focusing on whether that correction phase is over. A correction is generally considered a drop of 10-20 percent from a recent peak. The Dow has risen back 6.5 percent from its lowest close of the year on June 7, but it's still down 6.7 percent from its 2010 high.

  "I don't know that we're totally through the correction," said Stu Schweitzer, global markets strategist at JPMorgan's Private Bank in New York. "I do expect markets to remain quite volatile all through the rest of this year, but I still expect that we're going to end the year higher."

  Minerals companies led other shares higher after gold settled at another record high. Barrick Gold Corp. jumped 3.5 percent, while Newmont Mining Corp. rose 2.6 percent.

  Corporate news also brought out buyers. CVS Caremark Corp. rose 1.9 percent and Walgreen Co. rose 2.8 percent after the two companies settled a dispute over pharmacy prescriptions that had threatened to hurt profits. Dow component Caterpillar Inc. gained 1.4 percent after reporting sharply higher sales.

  The Dow rose 16.47, or 0.2 percent, to close at 10,450.64. The broader Standard & Poor's 500 index rose 1.47, or 0.1 percent, to 1,117.51. The Nasdaq composite index edged up 2.64, or 0.1 percent, to 2,309.80.

  All three indicators posted solid gains for the week. The Dow is up 2.3 percent, the S&P 500 2.4 percent and the Nasdaq 3 percent.

  The Dow posted its second consecutive weekly gain of more than 2 percent. Before that, the Dow had been down for three weeks. The last time the Dow had a two-week stretch of gains that strong was in November 2009.

  Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where consolidated volume came to 4.9 billion shares, versus 4.6 billion the day before. Volume was heavier because of the simultaneous expiration of four kinds of futures and options contracts, which occurs once every quarter.

  Trading was relatively quiet considering the options and futures expirations, which can often bring volatility as traders adjust their portfolios. The week that follows the June expiration is often a losing one for investors. The Dow has posted a loss during that week for the past 11 years, according to the Stock Trader's Almanac.

  Bond prices slipped, pushing interest rates higher. The yield on the benchmark 10-year Treasury note rose to 3.23 percent from 3.20 percent late Thursday.

  The dollar edged lower against the British pound and Japanese yen, while the euro edged down versus the dollar. The euro has regained strength over the past week amid encouraging signs in Europe's efforts to control its debt crisis. Spain had successful bond sales this week, and European leaders pledged to disclose the results of stress tests on banks.

  Crude oil rose 39 cents to settle at $77.18 per barrel on the New York Mercantile Exchange.

  Randy Frederick, director of trading and derivatives at Charles Schwab, said the market's bounce from its recent lows has come too quickly. He said professional traders are building up positions in investments that would cushion their losses if the market fell again.

  "Not that we're going into this big ugly bear market but to go back down to the lows that we were at just a few weeks ago, I think, seems very possible based on what I see," Frederick said. "I see a reason to be a little cautious right now."

  The coming week brings readings on home sales and consumer sentiment. The Federal Reserve also will meet on interest rates.

  Gold settled up $1,258.30 an ounce, a gain of $9.60. Barrick Gold rose $1.56, or 3.5 percent, to $46.38, and Newmont Mining climbed $1.57, or 2.6 percent, to $61.25. That’s the rap on the news: The Market came through for us this cycle with 100% profit on all spreads.  All our June spreads expired worthless.   JUNE POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS		CREDIT		CLOSE
RUT	Bull Put	500 - 510		15		.60		0.00
CME	Bull Put	240 - 250		15		.50		0.00
RUT	Bull Put	520 - 530		15		.40		0.00
MNX	Bull Put	150 - 160		15		.35		0.00
OEX	Bull Put	410 - 420		15		.35		0.00
CME	Bull Put	250 – 260		15		.35		0.00

PROFIT OF	$ 2175.00

Let’s start with some new July spreads.  We are going to the well one more time with the stocks and indexes we had last month, since all of their charts will show here an opening to make some more money. CME is sitting where we’re using the same spread for July as we had in June.  The others have new strike prices, but are still close to where we had them for June.  NEW TRADE ALERT (4) Please Note: This is a Day Order and Limit Order. RUSSELL 2000 INDEX   (RUT) OPENING  560-550 RUT JULY BULL PUT SPREAD (15 contracts) Sell 15 July Puts at 560 strike price
  Buy 15 July Puts at 550 strike price


Total Credit 0.45 per contract


Potential Profit $675.00


 Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $565.00 CME Group Inc. (CME)


OPENING 260-250 JULY BULL PUT SPREAD (15 contracts)
 

Sell 15 July Puts at 260 strike price


Buy 15 July Puts at 250 strike price


Total Credit 0.40 per contract


Potential Profit $600.00
Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $262.50


 MINI -NASDAQ 100 INDEX (MNX)


OPENING 170 – 160 JULY BULL PUT SPREAD (15 contracts)


Sell 15 July Puts at 170 strike price


Buy 15 July Puts at 160 strike price


Total Credit 0.35 per contract


Potential Profit $525.00
Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $172.50


S&P 100 INDEX (OEX)


OPENING 445 – 435 JULY BULL PUT SPREAD (15 contracts)


Sell 15 July Puts at 445 strike price


Buy 15 July Puts at 435 strike price


Total Credit 0.40 per contract


Potential Profit $600.00 Once Filled, Use a Conditional Order: Use a Stop or Buy Market if Touched Order if stock reaches $447.50






As always, Trade Happy and Trade Smart

Spread Update Stocks rose in a late rally on Friday as a strong forecast from a chip maker lifted tech shares and helped alleviate concerns about the economy's health after an unexpected drop in retail sales.
 

National Semiconductor Corp rose 5 percent to $14.21 a day after it forecast margins and revenues above estimates after a horrible 2009. The Philadelphia Semiconductor index rose 1.4 percent.

  "The macro news has been increasingly negative, but you still have some companies reporting good forecasts, and people start to think (selling) got a bit overdone," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com in Shrewsbury, New Jersey.

  "National Semiconductor made a positive announcement. That's why you're seeing the strength primarily in tech," he said.

  Even so, the volume was lackluster, indicating little conviction that the advance will continue next week.

  The Dow Jones industrial average gained 38.54 points, or 0.38 percent, to 10,211.07. The Standard & Poor's 500 Index rose 4.76 points, or 0.44 percent, to 1,091.60. The Nasdaq Composite Index  climbed 24.89 points, or 1.12 percent, to 2,243.60.

  For the week, the Dow rose 2.8 percent, the S&P gained 2.5 percent and the Nasdaq advanced 1.1 percent.

  COLD DAY FOR RETAILERS

  U.S. retailers' sales unexpectedly fell in May for the first time in eight months, the U.S. Commerce Department reported.

  But a jump in a consumer sentiment index to a near 2-1/2-year high in a preliminary reading for June tempered fears of a slowing economic recovery. The consumer sentiment reading came from the Thomson Reuters/University of Michigan Surveys of Consumers.

  Consumer-related shares were the hardest hit, with Home Depot down 1.5 percent at $32.22, and Procter & Gamble, down 1.5 percent at $61.01, weighing down the Dow industrials. The S&P retail index slid 0.2 percent.

  But commodity-related companies also gave support to stocks, with the S&P materials sector up 1.2 percent.

  U.S. Steel Corp jumped 3.8 percent to $44.82.

  VIX FALLS

  In another bullish sign, the S&P 500 found technical support around the 1,077 level that marks its 14-day simple moving average. The benchmark posted its first back-to-back close above its 14-day SMA since late April.

  The CBOE Volatility Index, a gauge of investor anxiety, fell 5.8 percent to settle at 28.79, its lowest level since May 13.

  Big-cap pharmaceutical companies' shares also advanced after Barclays Capital upgraded the sector to "positive" from "neutral," citing the revenue potential of new products. Pfizer Inc was the Dow's top percentage gainer, up 3.7 percent at $15.46.

  U.S.-listed shares of BP Plc  climbed 3.6 percent to $33.97 as UK officials made supportive comments about the company, even as scientists doubled estimates of the Gulf of Mexico's oil spill.

  About 7.31 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, the lowest in more than two months and sharply below last year's estimated daily average of 9.65 billion.

  Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 11 to 4, while on the Nasdaq, about five stocks rose for every two that fell. That’s the news rap for this weekend: The market gave us what we’ve been looking for with these two up days we’ve seen. Has anything changed to cause this up turn? Europe doesn’t seem to have improved their situation, and over the weekend, Japan has been added to the debt mess too, with the speech that their Prime Minister gave.   BP with their gulf mess is still making headlines with talk of this lasting 2 to 3 more weeks. There have been words spoken from the British government that they will back BP through this mess, though Britain is also on the list of European governments having problems with their debt load. So what are we looking at? We think we’re looking at a relief rally and some bottom fishing. Whatever we want to call it, it couldn’t have come at a better time for our spreads. Well, we may have found a bottom here, but as with all things to do with the market, it could change in a heartbeat. Our spreads have now added to their cushions, and it looks like we can just sit back and relax to the finish line this cycle. We will be looking for July spreads next week, so keep your eyes open for when they come. So let’s take a look at our spreads. JUNE POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS		CREDIT		CLOSE
RUT	Bull Put	500 - 510		15		.60
CME	Bull Put	240 - 250		15		.50
RUT	Bull Put	520 - 530		15		.40
MNX	Bull Put	150 - 160		15		.35
OEX	Bull Put	410 - 420		15		.35
CME	Bull Put	250 – 260		15		.35

PROFIT OF

$ 2175.00

1. RUT 500 – 510 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $649.00 Today ( 139.00  points away from our put spread) Profit potential of $60.00 per contract Contingent Stop Order set at $515.00 2. RUT 530 – 520   BULL PUT SPREAD (15 contracts) RUT CLOSED AT $649.00 Today ( 119.00 points away from our put spread) Profit potential of $40.00 per contract Contingent Stop Order set at $535.00 The RUT broke through 640 going the other way over the last two trading days, which his put us in a great spot to just sit back and relax on this one with only 4 trading days left. With the big drop in May, the RUT is setting up to make us some money over the summer months. 1. CME 240 – 250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $302.45 Today ( 52.45  points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $255.00 2. CME 260-250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $302.45 Today ( 42.45  points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $265.00 CME had a big move on Thursday so the small loss on Friday doesn’t amount to much. With 5 days left we think we can coast out on this one also. MNX 160 – 150  BULL PUT SPREAD (15 contracts)  MNX CLOSED AT $184.72 Today ( 24.72 points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $162.50 The MNX has traded much like the RUT and has left us with another money maker going forward. So we can relax with this one also going into the last 4 days of this cycle. OEX 420 – 410  BULL PUT SPREAD (15 contracts) OEX CLOSED AT $493.02 Today (73.02 points away from our put spread) Profit potential of $.35.00 per contract Contingent Stop Order set at $415.00 The OEX also looks to be letting us breathe this cycle. We can see it easily move into the 510 range from here. Again, we only have 4 days left here also.  We have started looking into July for prices to setup our spreads, so keep your eyes open for them coming. As Always – Trade Happy, Trade Smart.

Spread Update The stock market had another late-day slide, this time because of fears that the Gulf oil spill will send BP into bankruptcy court.

  The Dow Jones industrials, up more than 125 points at midday, closed down 41. Most selling came in the last hour, the third time in four days that stocks had a late-day drop.

  Investors got a "sell" signal from news reports that raised the possibility of worsening financial fallout from the oil spill. A group of about 30 U.S. lawmakers sent a letter to BP CEO Tony Hayward asking him to halt dividend payments and advertising until the leaking well is capped and the spill is cleaned up. Investors tend to sell any time a company's dividend appears to be in jeopardy. BP is scheduled to make a $2.63 billion payout on June 21.

  Worries about potential fallout from a BP bankruptcy filing were enough to make investors shrug off reassuring words about the economy early in the day from Federal Reserve Chairman Ben Bernanke. BP fell 15.8 percent and selling spread across the market.

  The slide in energy stocks including BP and Anadarko Petroleum Corp., which dropped 18.6 percent, undercut the market's upward momentum, said Peter Boockvar, equity strategist at Miller Tabak.

  "The oil stocks are getting killed. They're widely owned so anytime you see that kind of activity it makes people nervous," Boockvar said.

  The drop came a day after the Dow climbed 123 points on easing concerns that the economy would fall back into recession. The confidence extended into the first part of trading Wednesday after Bernanke said debt problems in Europe might only amount to a "modest" drag on the U.S. economy if the financial markets can halt their slide.

  He told the House Budget Committee that the economy is getting better but that jobs and housing are likely to remain weak. The enthusiam over his testimony faded after speculation arose that BP wouldn't be able to recover from the oil spill.

  That was enough to push some traders out of the market. Many have been anxious since last month that problems from the Gulf spill to spending cuts in Europe would slow an economic recovery. The concerns have pounded U.S. stocks since they set 2010 highs in late April. They are down more than 10 percent, a drop that's known as a "correction."

  David Chalupnik, head of equities at First American Funds in Minneapolis, said it's most likely that Bernanke is right that the economy will continue to recover but that trading will remain choppy. He said traders won't get a better sense about how the economy is holding up until July when earnings reports and more economic numbers come out.

  "We're probably in the fifth inning of the correction. Maybe the sixth inning," Chalupnik said. "The next month, I think, is just going to be extremely volatile."

  The market also took a hit after the euro slid back below $1.20. The 16-nation currency's inability to stay above that psychological erased an early burst of confidence in Europe's ability to contain its debt problems.

  "That $1.20 level seems to be what people are keying off of so when you break under they sell futures," said Rick Bensignor, chief market strategist at Execution LLC in New York, referring to stock futures for the Standard & Poor's 500 index.

  Bensignor also said the guessing about BP's fate made it more likely that the company would run into more trouble. "The talk certainly doesn't help the situation."

  According to preliminary calculations, the Dow fell 40.73, or 0.4 percent, to 9,899.25.

  The Standard & Poor's 500 index fell 6.31, or 0.6 percent, to 1,055.69, while the Nasdaq composite index fell 11.72, or 0.5 percent, to 2,158.85.

  That’s the rap on today’s news: Bernanke got the day moving in the right direction with upbeat statements to the House Budget Committee on the recovery being in place.  Yet, by the end of the day we lost all that on reports from an analyst that BP is hard pressed to pay for the cleanup in the gulf. We don’t know about you, but for every analyst that says the sky is blue, we’ll find 3 that will tell you that it’s green.  BP is a very large company making plenty of profits on other operations. As this mess gets worked out, the one thing that may drive them to bankruptcy is our own government in their drive to stop all fossil fuels from being collected. Just the 6 month hold on oil drilling will put another 40,000 people out of work and put the economy through even more stress than the pain it’s already experiencing from the gulf. That’s one thing this government has been good at is spreading the pain.     As we get tossed around this cycle, with these wild swings that we have seen over the last two weeks, we’re still sitting basically where we started with over two weeks of this wild cycle under our belt and a week and a half to go to the finish line. We’d say that we have weathered the volatility very well, as our spreads, for the most part still maintain their cushions. Here, let’s take a look at where we are sitting on these spreads. JUNE POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS		CREDIT		CLOSE
RUT	Bull Put	500 - 510		15		.60
CME	Bull Put	240 - 250		15		.50
RUT	Bull Put	520 - 530		15		.40
MNX	Bull Put	150 - 160		15		.35
OEX	Bull Put	410 - 420		15		.35
CME	Bull Put	250 – 260		15		.35

PROFIT OF

$ 2175.00

1. RUT 500 – 510 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $618.29 Today ( 108.29  points away from our put spread) Profit potential of $60.00 per contract Contingent Stop Order set at $515.00 2. RUT 530 – 520   BULL PUT SPREAD (15 contracts) RUT CLOSED AT $618.29 Today ( 88.29 points away from our put spread) Profit potential of $40.00 per contract Contingent Stop Order set at $535.00 The RUT broke through support 640, and now sitting at the 620 support line. If we can hold here it wouldn’t take much to get us back to 640. Looking at the chart though we still have good support at 600, 580 and 560, if the market continues it move lower, support does gets a little thin below 560. So we’ll keep looking for a bounce in here as we get close to these support lines to carry us to the end of the cycle. 1. CME 240 – 250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $291.47 Today ( 41.47  points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $255.00 2. CME 260-250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $291.47 Today ( 31.47  points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $265.00 CME has been moving with the market over the last 3 trading sessions, and we have lost some cushion because of it. There’s no real news going on with the stock and that’s why it’s moving the way it is these last few days. Looking at the chart, the stock has dropped out of the bottom of its channel into this range around 290 which is a strong support line going back to August of last year. MNX 160 – 150  BULL PUT SPREAD (15 contracts)  MNX CLOSED AT $177.89 Today ( 17.89 points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $162.50 The MNX has traded much like the RUT over the last 3 sessions only to fall through its 180 support line the next strong support line here is 175. We could easily see it drop to this level before we may see a bounce in the index. Here again we have many lines of support any which could hold before we hit are spread. OEX 420 – 410  BULL PUT SPREAD (15 contracts) OEX CLOSED AT $478.61 Today (58.61 points away from our put spread) Profit potential of $.35.00 per contract Contingent Stop Order set at $415.00 The OEX had another tough day dropping through its 490 support line. Here also we have many lines of support before we hit our spread at 420. As Always – Trade Happy, Trade Smart.

Spread Alert European stock markets traded mostly flat Monday as investors shrugged off more sobering news about shaky government finances ahead of a busy schedule of U.S. economic data later in the week.

  The CAC 40 index of leading French shares was down almost 3 points at 3,512.16 while Germany's DAX rose 38.47 points or 0.7 percent to 5,984.65. Spain's IBEX index fell 0.7 percent to 9,363.2.

  Oil, meanwhile, rose above $74 a barrel, and the dollar gained against the yen and weakened against the euro.

  Markets in the U.S. and Britain were closed for public holidays.

  In an otherwise quiet session due to the U.K. bank holiday, investors remained focused on Europe's debt crisis. The French parliament is scheduled to go over a revised budget bill today ahead of its expected approval of France's share of the trillion dollar bailout for struggling member states.

  German markets shrugged off the surprise resignation of President Horst Koehler. Koehler quit Monday from the largely ceremonial post after being criticized for remarks in which he appeared to link military deployments abroad with the country's economic interests.

  Eurozone inflation increased in May but remained well below the 2 percent medium-term target set by the European Central Bank, figures released by Europe's statistics office showed Monday.

  Markets had no direction from U.S. markets, which were closed for Memorial Day. But a heavy schedule of economic data due later in the week including the May jobs report is expected to drive trading as investors get a clearer picture of the economic recovery.

  Comments by European Central Bank chief Jean-Claude Trichet in support of closer control of financial and economic policy across the 16-nation European currency zone were not enough to stir a reaction on markets, where volumes were thin.

  In an interview with French daily Le Monde, Trichet reiterated his call for a "budgetary union" to complement the eurozone's monetary union.

  Analysts characterized the markets as volatile and saw investors holding back as doubts remain the European Union can contain a debt crisis that has sent the euro to four-year lows.

  "They are still cautious at this point," said Mark Tan, who helps manage about $15 billion of equities and bonds at UOB Asset Management in Singapore. "Liquidity in the stock market is still pretty tight."

  On Friday, the Dow Jones industrials shed 1.2 percent to 10,136.63 after Fitch Ratings gave Spain the second downgrade of its credit rating in a month. The rating agency's action, coming just after European markets closed Friday, gave investors another reminder of the long-term economic problems still facing debt-laden countries.

  The news, however, did not come as a shock to investors in Asia, where expectations of a downgrade of Spain had been circulating for some time. Markets in Asia were mixed in early trade and then mostly headed higher.

  "Asians were prepared for the downgrade for Spain," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "So Asian markets are quite stable today. Even Bangkok is up." Jackson Wong, vice president at Tanrich Securities in Hong Kong, also said he viewed Asia as stabilizing, despite some investor nervousness.

  "The momentum is still on the positive side," Wong said.

  Japan's Nikkei 225 stock average inched up 5.72 points, or 0.1 percent, to 9,768.7 amid news that industrial production in the world's No. 2 economy rose for a second straight month in April, propelled by robust growth in China and the rest of Asia.

  Separately, India's economic growth accelerated to 8.6 percent in the January-March quarter, its best in two years as Asia's third-largest economy returns to pre-crisis levels of expansion.

  In currencies, the dollar rose to 91.45 yen from 91.02 yen late Friday. The euro rose to $1.2309 from $1.2272, a bump upward that may stem from the overselling of euros last week.

  Benchmark crude for July delivery was up 49 cents at $74.46 a barrel in electronic trading on the New York Mercantile Exchange. That’s the news wrap for tonight. To begin with, some of our auto-trading broker’s did not receive their buy orders last Sunday night, so what we’re planning to do is set up positions for those that were unable to get filled last Monday. These new spreads will be in the same stock and index that the first spreads were in, though they may have different strikes and credits as the first. Well, with the oil continuing to pour out into the gulf, Israel boarding the fleet of relief ships going to Gaza, and the continued problems with European debt, there seems to be not much good news out there.  And still, Asian and European markets seem to hold their own against the tide.  With the markets opening here after a 3 day weekend, we have a ton of economic reports coming out this week, many of which are market movers.  At the time this newsletter was written, futures were flat.  This is a good sign as to how we may open tomorrow morning. Our spreads are all doing great. We didn’t get the MNX or the OEX spreads filled last week, so we’ll continue with day orders to get them filled. We may change some of the strikes and credits from the original spreads to get them filled .    We have 4 spreads that we are going to list to be filled tomorrow, two of them will be the CME and RUT spreads, so if you already have these don’t have them filled again. 1. RUT 530 – 520   BULL PUT SPREAD (15 contracts) RUT CLOSED AT $661.61 Today ( 131.61points away from our put spread) Profit potential of $60.00 per contract Contingent Stop Order set at $535.00 2. CME 260-250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $316.65 Today ( 66.65  points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $265.00 3. MNX 160 – 150  BULL PUT SPREAD (15 contracts)  MNX CLOSED AT $185.24 Today ( points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $162.50 The MNX – We have not traded in it over the last few months do to the low VIX numbers we where seeing earlier this year, but now with the higher VIX numbers we can make money here.

4. OEX 420 – 410  BULL PUT SPREAD (15 contracts) OEX CLOSED AT $493.06 Today ( points away from our put spread) Profit potential of $.35.00 per contract Contingent Stop Order set at $415.00 The OEX is a spread that hit our contingent stop order last month do to the 1000 pt drop we saw in the middle of the last cycle. Over all the OEX is a good spread to be in this month.

JUNE POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
RUT	Bull Put	500 - 510		15	.60
CME	Bull Put	240 - 250		15	.50

PROFIT OF

$   1250.00

   RUT 500 – 510 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $661.61 Today ( 152.61 points away from our put spread) Profit potential of $60.00 per contract Contingent Stop Order set at $515.00 CME 240 – 250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $316.65 Today ( 66.65 points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $255.00

Spread Alert  We are working on improving our website over the next few weeks. We will continue on giving spread update during this time of change, but the site will be changing slowly over the next few weeks with content not being as full as a normal update. Thank you for your patience as we hope you enjoy the improvements as they come online. Income Spread Trader.com We’re going to have a short newsletter tonight do to these changes  To begin with we only had the RUT  630 -620 put spread ended the month profitable, and that was by the skin of are teeth. June is a 5 week option cycle so we’re starting it out slowly. We are opening June with 2 new spreads RUT 500 – 510 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $649.29 Today ( points away from our put spread) Profit potential of $60.00 per contract Contingent Stop Order set at $515.00 The RUT finished the week on an up note as the pressure eased on the selling, on hopes that Europe can some how right their sinking ship. As we look at the chart our spread doesn’t show up over the last 6 months, but with the added volatility in the market we are able to get this spread way out of the money for a good price. CME 240 – 250  BULL PUT SPREAD (15 contracts) CME CLOSED AT $318.51 Today ( points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $255.00 CME did well during the selloff that we have seen over the last few weeks, and we would have had CME as a May spread, except for the fact it had earnings in May, again we are able to get good strike prices well out of the money do to the volatility.

Spread Update Another wave of selling hit stocks Wednesday in response to growing fears that Europe has no quick fix for its debt crisis.

  The Dow Jones industrial average fell about 67 points after having been down as much as 186. It was the Dow's ninth drop in 12 days.

  The extent of investors' worries became clear after the euro bounced off a four-year low but stocks still fell. The euro has been driving stock trading for weeks.

  The Standard & Poor's 500 index, widely considered one of the best measures of how the stock market is doing, neared a 10 percent drop from the 2010 trading high it reached last month. That would mark the first time the market has had what's known as a "correction" since it bounced off a 12-year low in March last year. Most analysts say a correction is a drop of at least 10 percent.

  The latest worry came from Germany, where regulators banned what's called naked short selling. That occurs when traders bet against investments they don't hold. The rule covers European government bonds, credit default swaps and the shares of several financial companies.

  The sudden announcement late Tuesday from Germany's financial regulator was seen in the markets as another example of disarray in Europe's financial system. Analysts said the hasty move only deepened the uncertainty about what steps governments might take next in hopes of containing the selling. Major European stock markets tumbled nearly 3 percent.

  Maury Fertig, chief investment officer at Relative Value Partners, in Northbrook, Ill., said memories of the market's crash in late 2008 and early 2009 are still raw and that traders don't want to be caught when stocks start to slide.

  "It's shoot first, ask questions later," Fertig said. "The freshness of the pain of 2008 is still really stuck in investors' minds."

  Germany enacted the short-selling rule in hopes of curtailing sudden swings in European debt markets, like the ones that crippled Greece's ability to borrow money after the rates on its bonds shot higher earlier this year.

  European leaders agreed last week to a nearly $1 trillion bailout program to help countries like Greece that face mounting debt problems. The deal was initially embraced by financial markets, but traders quickly became concerned that the austerity measures tied to the rescue package would upend a rebound.

  "People are still just very concerned about what's going on overseas," said Sam Stovall, chief investment strategist in U.S. equity research at Standard & Poor's.

  The Dow fell 66.58, or 0.6 percent, to 10,444.37 after dropping 115 on Tuesday.

  The S&P 500 index fell 5.75, or 0.5 percent, to 1,115.05. At its low Wednesday, the index was down 9.8 percent from its 2010 trading high. Based on where it closed Wednesday, the S&P 500 index is down 8.4 percent from its peak this year. Analysts at S&P, who have evaluated the events driving the market this year, say that a drop of as much 15 percent is possible.

  The Nasdaq composite index fell 18.89, or 0.8 percent, to 2,298.37.

  Bond prices slipped, pushing yields higher. The  yield on the benchmark 10-year Treasury note rose to 3.37 percent from 3.35 percent late Tuesday. Bond yields have been falling in recent weeks as investors flock to safe investments.


  U.S. investors haven't been focusing on the U.S. economy but given the downbeat mood on Wall Street downbeat news drew some attention.

  The Mortgage Bankers Association reported that the number of homeowners who missed at least one payment on their mortgage rose to a record in the first quarter. That signaled that foreclosures could rise and suggested that troubles in the U.S. housing sector are far from over.

  Minutes from the Federal Reserve's late April meeting indicated that policymakers were more upbeat about the prospects of the U.S. economy than they were at the start of the year. The forecast that was updated for last month's meeting was that the economy can grow by 3.2 percent to 3.7 percent this year. That's stronger than in January when the Fed predicted growth of 2.8 percent to 3.5 percent.

  The Fed's take on the economy, however, came before the stock market started tumbling this month on concerns about debt in Europe.

  Michael Church, president at Addison Capital Group in Philadelphia, said stocks were overdue for a break and that while the concerns about Europe are real, the slide in stocks could turn out to be little more than a correction.

  "The risk is that this does derail things but I'm not convinced that that's reality yet," he said. Church contends that stocks will push higher again if it becomes clear that the debt problems in Europe can be contained, at least for now.

  The risk continues into another week as what we talked about last weekend plays out.  With Europe’s $1 trillion bailout, tighter rein on spending, and the cuts in government spending that have already been made to get their houses in order, investors have come to the conclusion that this will derail economic recovery coming any time soon to Europe.  We guess the term “no free lunch” is finally coming to the investors’ minds, regarding Europe and their spending ways.

  As the Euro continues to drop in value to the dollar and to other currency around the world, we wonder if Iran still wants their oil paid for in Euro’s.  We have always had a bit of a disconnect about why the Euro was out pacing the US dollar last year, when we felt that their economies weren’t in much better shape then ours at the time. We have one day left on our spreads and they look great. What might knock us out would be if another country were to fail, or a surprise interest rate hike, because it looks to us like most of the damage is priced in now.  But things can change fast, as we’ve seen. We’re still 24 points out on are RUT spread after this free fall we’ve seen the last three days. Not a great cushion, but one we can live with. Let’s go on now and look at our spreads Remember, we will be doing new June spreads this weekend, so watch for your news letter. MAY POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50	Closed
RUT	Bull Put	630-620		15	.45
AAPL	Bull Put	230-220		15	.35	closed
RUT	Bull Put	680-670		15	.50	closed
RUT	Bull Put		650-640	15	.40

PROFIT OF

$   ?

RUT 650-640 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $674.40 Today (24.40 points away from our put spread) Profit potential of $40.00 per contract Contingent Stop Order set at $655.00 RUT 630-620 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $674.40 Today (44.40 points away from our put spread) Profit potential of $45.00 per contract Contingent Stop Order set at $635.00 The RUT:  we have tomorrow and the first tick on Friday to go. We haven’t talked much about the first tick on Friday in awhile, and hopefully we won’t have to, but it may come down to that this month, if we continue our move lower.  If we feel that we need to, we will stop our contingent stop order tomorrow at the end of the day. We may need those extra 5 points to make the 650 - 640 work in our favor.   As alway, Trade Smart, Trade Smart

Spread Update Stocks tumbled for a second day Friday after concerns grew that the deep spending cuts under Europe's bailout plan would slow a global recovery.

  Countries including Greece and Spain are being forced to make budget cuts because of soaring debts.  Investors are concerned that this new frugality could slow not just the European economic recovery, but the global rebound as well.  So they're shrugging off signs of a sustained U.S. turnaround and are instead taking cues from developments abroad.
  The Dow Jones industrial average ended down 163 points but closed well off its lows of the day.  The Dow and other indexes posted big gains for the week after rocketing higher Monday on hopes that Europe's emergency loan package would prevent a debt crisis in Greece from spreading.  Enthusiasm about the plan wore off as the week went on.

  The drop in U.S. markets Friday followed a slide of more than 3 percent in European indexes.  The euro dropped to a 19-month low against the dollar and is close to its lowest level in four years as confidence in Europe's ability to contain its fiscal problems wanes.

  Investors seeking safety piled into treasuries and the dollar.  Gold settled lower after hitting another record.  Crude oil sank nearly 4 percent, and an indicator of stock market volatility jumped.

  Currency traders have been moving out of the euro throughout the week because of concerns that cost-cutting measures in countries like Greece, Spain and Portugal would slow economic activity on the continent and elsewhere.  Now stock investors are also looking at those same problems.

  Shifting sentiment about the problems in Europe whipsawed the market during the week. Major indexes posted their biggest gains in more than a year on Monday after the nearly $1 trillion rescue package from the European Union and International Monetary Fund raised hopes that debt-strapped EU countries wouldn't be a drag on a global rebound.

  As the glow from the bailout package faded during the week, the euro fell sharply against the dollar. The higher dollar hit the prices for oil and other commodities, hurting major U.S. energy and materials companies.

  "The euro is leading the market down," said Uri Landesman, president of Platinum Partners in New York. "Clearly the action in the euro is reflecting the fact that at least currency investors don't think the bailout plan plus the austerity measures are sufficient."

  Investors now worry that the spending cuts in Europe being called for in the bailout package will curtail the ability of weaker countries like Spain and Portugal to grow their way out of a recession. More strikes are expected in Spain and Greece as workers protest cuts in pensions and other public spending.

  "Austerity generally is antigrowth.  There is every possibility that they go into a recession over there," said Linda Duessel, equity market strategist at Federated Investors in Pittsburgh. The euro, which is used by 16 countries, slid as low as $1.2355 in New York, its weakest point since October 2008.  The euro has dropped more than 6 percent since the beginning of the month.

  "Manufacturing has been doing very well.  Exports have been doing very well.  And if there is any fear that the global engine is going to slow, even at the margins, it creates uncertainty," said Quincy Krosby, chief market strategist at Prudential Financial.

  As they sold Friday, traders looked past upbeat reports on retail sales and industrial production.  The reason:  they make their moves based on what they expect the economy and corporate profits will be six to nine months in the future.  Investors are now factoring slower growth in Europe, and perhaps a recession, into stock prices.  Good news from the U.S. economy last month is now almost immaterial in traders' eyes.

  And, if there are any signs of weakness in U.S. economic reports, that will likely be seen as a bad omen and set off more selling.

  Investors also are concerned about the stock market itself, especially the return of the kind of volatility seen during the financial crisis.  The Dow has posted swings of more than 100 points in 11 of the past 14 days.  Analysts say the bumps will continue until it becomes clearer how Europe will manage its debt problems.  Early enthusiasm over last week's nearly $1 trillion rescue plan for Greece and other countries has faded.

  Many traders are predicting that the ride will continue to be rough.  The Chicago Board Options Exchange's Volatility Index -- called the market's fear gauge -- is up 79 percent since April 26, when the Dow closed at its 2010 high of 11,205.  The rise in the volatility index means investors are forecasting more drops in the market. There were also concerns Friday about corporate profits.  Shares of credit card companies tumbled after the Senate voted to force them to reduce fees for debit card transactions. Visa fell 9.9 percent, while Mastercard lost 8.6 percent..

  Analysts said that stocks ended off their worst levels because traders aren't sure what leaders in Europe might do over the weekend to shore up confidence in the euro and the EU overall.  The bailout announcement came on Sunday last week.

  The market ended off its lows but it was still a wild week for investors.  After jumping 405 points on Monday, the Dow slipped Tuesday and jumped 149 points on Wednesday. The gains helped the Dow erase its losses from late in the prior week when fears about debt woes in Greece pounded the market.

  Selling resumed Thursday to send the Dow down about 114 points after more worries emerged about the cost of the European rescue.

  For the week, the Dow rose 2.3 percent, the S&P 500 index added 2.2 percent and the Nasdaq gained 3.6 percent.

  Treasuries jumped Friday, pushing down yields. The yield on the benchmark 10-year Treasury note fell to 3.46 percent from 3.53 percent late Thursday.

  The Chicago Board Options Exchange's Volatility Index -- known as the market's fear gauge, jumped 17.1 percent.

  Gold hit a record of $1,249.70 an ounce before settling down $1.40 to $1,227.80.

  Crude oil fell $2.79 to $71.61 per barrel on the New York Mercantile Exchange.

  Investors looked past improved reports on April retail sales and industrial production. Reports are due next week on manufacturing, housing and inflation.

  About seven stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 6 billion shares compared with 4.9 billion Thursday. The Russell 200 index of smaller companies lost 15.87, or 2.2 percent, to 693.98.  For the week, it rose 6.3 percent.

  Britain's FTSE 100 dropped 3.1 percent, Germany's DAX index fell 3.1 percent, and France's CAC-40 tumbled 4.6 percent.

  The Dow Jones U.S. Total Stock Market Index rose 314.13 points for the week, or 2.7 percent, to 11,758.38.

  Now that we have the news wrap for the end of the week, where do we go from here? We have one week left on our spreads, and it looks like its going to be a rough one as problems with Europe seem to be never ending. News seems to be geared to what’s happening there rather than here. When the credit bubble popped, Europe took the lead in saving its banks with huge bailout packages. While investors were impressed with the speed at which the governments acted, the solutions seem now to have just moved the problems from the institutions to the governments themselves. The impression now is that the ethnic equation has come into play, as hard-working, frugal Germans help the more care-free Greeks.  Other Mediterranean countries are going to be facing the same problems.  At the heart of the euro currency zone are issues that have plagued that area since the dawn of civilization.  
  So what is the US market trying to do?   It looks to us like it’s trying to take into account the failure of countries to pay their debt.   Now how do you price in the failure of a country? We don’t think it’s so much the impact that the country’s failure has on the market directly, as what that failure will mean to the rest of the world. We may see even tighter credit markets as creditors think to themselves, “How does a country fail?”  We saw the signs in Iceland as their country failed, but they’re not a part of the Euro Currency Zone, so they don’t have the backing of the Euro dollar, nor the impact on the US market. 
   Now we find the list of countries on the brink of insolvency growing. It seems to always be something that grabs are attention away from what really matters in this market:  the US economy and how it fares through this maze. We are in it for the short term with month long spreads, so this day to day news needs to be added to our consideration so we can continue to trade profitably in the near term.
  Let’s move on to the Spreads as we finish them out for this cycle. MAY POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50	Closed
RUT	Bull Put	630-620		15	.45
AAPL	Bull Put	230-220		15	.35	closed
RUT	Bull Put	680-670		15	.50	closed
RUT	Bull Put		650-640	15	.40

PROFIT OF

$   ?

RUT 650-640 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $693.91 Today (43.98 points away from our put spread) Profit potential of $40.00 per contract Contingent Stop Order set at $655.00 RUT 630-620 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $693.91 Today (63.91 points away from our put spread) Profit potential of $45.00 per contract Contingent Stop Order set at $635.00 The Rut been are money maker for over a year new and looks to continue that role for the time being as volatility returns to the market place. With the VIX rising we’ll stay here for the coming months, as things work themselves out.      As Always,  Trade Happy and Trade Smart 

Stocks bounced higher Wednesday after investors focused again on the improving U.S. economy.

  The Dow Jones industrial average climbed about 110 points in afternoon trading to return to where it was a week ago, before stocks tumbled on concerns about debt problems in Europe.

  Better economic news helped reassure investors that the recovery is continuing.  The Commerce Department said exports rose in March to their highest levels since 2008.  That was a welcome signal for the manufacturing industry, which has been strengthening since last year.  Increased demand could eventually lead to more hiring.

  Most European markets posted big gains after better economic numbers signaled that a rebound is occurring in many parts of the continent.  Stocks surged around the world Monday after European leaders agreed to a nearly $1 trillion bailout to contain fears of a debt crisis that pounded markets last week.

  While stocks have stabilized, currency markets are still in flux.  The euro edged higher against the dollar Wednesday but is still hovering near a 14-month low.

  Uncertainty over the long-term health of the euro helped lift gold to a record high. Investors worry that the euro could still lose value as European countries try to work though debt problems by taking on more debt.  Many countries also will have to slash spending.  Investors have turned to gold as an alternative to holding currencies.


  Gold jumped $25.50 to $1,245.80 an ounce.  That lifted shares of gold producers Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp.

  Max Bublitz, chief strategist at SCM Advisors in San Francisco, said the swings of the past few weeks spooked investors who had become overconfident.  Now, the focus can return to the U.S. economy.  Expectations of a recovery have driven the market higher since major stocks indexes hit 12-year lows in March last year.  The market made steady gains from February-April before concerns about Greece briefly erased stocks' gains for the year.

  "We got a lot of the bullishness and complacency out of the market," he said.  "As long as we have doubters out there, then I'm a lot more comfortable saying the trend that's been in place the last 14 months stays there."

  In mid-afternoon trading, the Dow rose 110.56, or 1 percent, to 10,858.82.  The Standard & Poor's 500 index rose 11.50, or 1 percent, to 1,167.29, while the Nasdaq composite index rose 38.66, or 1.6 percent, to 2,413.97.

  Bond prices fell, pushing yields higher.  The yield on the benchmark 10-year note rose to 3.56 percent from 3.53 percent late Tuesday.

  Crude oil fell $1.31 to $75.06 per barrel on the New York Mercantile Exchange after the International Energy Agency said global oil demand is expected to rise less than previously expected in 2010.

  Daniel Penrod, senior industry analyst for the California Credit Union League in Ontario, Calif., said the market's recovery of what it lost in last week's slide is a good sign.  Penrod said modest moves in stocks Tuesday and the climb Wednesday indicate that stability is returning to the market.

  "The treading water or the slow gains are really pieces that can help it gain traction," Penrod said.  "If you're on ice you don't gun the engine to try and move faster.  You slowly move forward to gain traction."

  The Commerce Department said that the nation's trade deficit rose to a 15-month high in March as higher oil prices pushed import costs higher.  The report also showed exports rose 3.2 percent to their highest level since October 2008, a sign the economy continues to get stronger.

  Morgan Stanley shares fell after The Wall Street Journal reported that the investment bank is facing an investigation into its dealings in mortgage securities.  The stock fell 83 cents, or 2.9 percent, to $27.55. A Morgan Stanley spokesman said the bank hasn't been contacted by the Justice Department about the deals in question and that he isn't aware of an investigation. Freeport-McMoRan rose $2.01, or 2.9 percent, to $72.25, while Newmont Mining rose 84 cents, or 1.4 percent, to $59.04.

  Five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 730 million shares, compared with 838 million shares traded at the same point Tuesday. The Russell 2000 index of smaller companies rose 15.67, or 2.3 percent, to 711.15

  Those that didn’t close out their May spreads can breath a lot easier now that the market has been moving higher over the last three days with all of them adding back to their cushions. For us that closed our spreads, the one RUT spread is sitting well over our strike price.  We are going to add a new one to our list of spreads.

  NEW TRADE ALERT (1) Please Note: This is a Day Order and Limit Order RUSSELL 2000 INDEX (RUT) OPENING 640 – 650 MAY PUT SPREAD (15 contracts) Sell 15 May Puts at 650 strike price Buy 15 May puts at 640 strike price

  Total Credit 0.40 per contract

  Potential Profit $600.00

  Once Filled, Use a Conditional Order; Use a Stop or Buy Market if Touched Order if stock reaches 655.00 MAY POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50	Closed
RUT	Bull Put	630-620		15	.45
AAPL	Bull Put	230-220		15	.35	closed
RUT	Bull Put	680-670		15	.50	closed

PROFIT OF

$   ?

RUT 630-620 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $716.11 Today (86.11 points away from our put spread) Profit potential of $45.00 per contract

Contingent Stop Order set at $635.00 RUT had a good day as did the rest of the market as the credit worries subside and investors are back to looking at economic reports to make trading decisions rather than fear about Europe.

  As Always,  Trade Happy and Trade Smart 

Spread Update

The stock market extended its slide Wednesday after investors couldn't shake their concerns about European countries' big debt loads.

  The Dow Jones industrial average ended down about 59 points to put its two-day drop at 284. The Dow halved its loss by the close, but finished off its high of the day. Treasury prices rose and pushed down interest rates in the bond market for a second day.

  A drop in the euro and a rise in the dollar continued to ram markets around the world. The stronger dollar hurts U.S. stocks by cutting into profits of U.S. companies that do business abroad. A higher dollar also hurts commodity prices by reducing demand from foreign buyers.

  Investors are concerned that a $144 billion aid package for Greece won't be adequate to keep debt problems in Europe from spreading. There were also questions about whether the bailout would amount to more than a short-term fix for Greece.  Investors don't want the trouble in Greece to spill to other countries and disrupt a global rebound.

  Swings in global stock markets have intensified in the past week. Wednesday was the sixth time in seven days the Dow moved by more than 100 points.  Investors have questions about Greece, but they're also awaiting the government's April jobs report on which comes out on Friday and monitoring Washington's overhaul of the rules that govern financial companies.

  The problems in Greece are rattling the market partly because they are reminiscent of the subprime mortgage crisis in the U.S. that at first appeared contained. That bad debt cascaded through the world's financial system and pushed the U.S. economy into recession at the end of 2007.

  German Chancellor Angela Merkel on Wednesday encouraged lawmakers in Berlin to rush the approval of Germany's share of the Greek rescue plan by Friday. Analysts say delays could bring more upheaval to global markets.

  Investors fear that if a tourniquet for Greece's financial problems doesn't hold, it would be harder to help larger countries like Spain and Portugal that also face big deficits. Moody's Investors Service warned on Wednesday that it could cut Portugal's credit rating two notches in the next three months. Standard & Poor's cut Portugal's credit rating last week.

  Adam Gould, senior portfolio manager at Direxion Funds in New York, said the uncertainty about what will happen in Europe is keeping investors from buying dips in the market the way they have for most of the 14-month climb in stocks.

  "This is really a story that has the market spooked," Gould said. "First it was Greece. Now it's Spain and Portugal."

  Fixing Greece's financial problems won't be easy. Riots erupted in Athens on Wednesday over tax hikes and government spending cuts that the International Monetary Fund and other European nations are requiring as part of the bailout. Three people were killed in the protests.

  The problems of heavy government debts are a big test for the euro. Sixteen countries use the common currency. The euro fell against the dollar, sliding as low as $1.2805 in New York. That was its weakest level since March 2009.

  The Dow fell 58.65, or 0.5 percent, to 10,868.12. It had been up as much as 20 points and down nearly 112 points.

  The Dow is down 2.5 percent in two days, its steepest back-to-back drop in three months.

  The broader Standard & Poor's 500 index fell 7.73, or 0.7 percent, to 1,165.87, while the Nasdaq composite index fell 21.96, or 0.9 percent, to 2,402.29.

  Bond prices rose.  The yield on the benchmark 10-year Treasury note fell to 3.54 percent from 3.60 percent late Tuesday. Gold rose. Crude oil fell $2.77 to $79.97 per barrel on the New York Mercantile Exchange.

  Kevin Mahn, chief investment officer at Hennion & Walsh in Parsippany, N.J., said the debt problems are severe but not new. He said investors had been looking for an excuse to sell stocks after the market's steep 14-month climb.  Mahn expects the big back-and-forth moves will continue.

  "I think it's going to be more of an extended pause than a correction," Mahn said.

  The drop in commodity prices hurt energy and materials stocks. Retailers also fell ahead of April sales reports on Thursday.

  Occidental Petroleum Corp. fell $3.66, or 4.2 percent, to $82.88, while Best Buy Co. slid $1.65, or 3.7 percent, to $42.90.

  Investors looking for continued signs of a U.S. rebound found another encouraging sign on employment Wednesday.  Payroll company ADP said private employer’s added 32,000 jobs last month. That was slightly above expectations.

  The ADP report is seen as early indicator of the government's monthly employment report, though there are often wide variations because the ADP only accounts for private-sector jobs. The Labor Department is expected to report Friday that the unemployment rate was unchanged at 9.7 percent last month while employers added 200,000 jobs. Unemployment is considered the main obstacle to a sustained recovery of the U.S. economy.

  A trade group said that service industries expanded in April at a slower pace than economists expected. The Institute for Supply Management said its service sector index was unchanged at 55.4 in April from March. Analysts expected an increase. Still, a reading above 50 indicates growth.

  About four stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume rose to 6.8 billion shares from 6.6 billion Tuesday. With all that said and done, the market has everyone on the edge of their seats with worry. As we look at our spreads, most have taken the ride down well, while we still maintain a good cushion, the only one that has us worried is our second RUT spread 680 – 670. Looks to us like there is going to be a war zone developing between 690 and 680, which we’ll show on the chart tonight. The good thing is that the RUT did close above the low of the day.
   It’s always hard to gage how the US market will react to outside events such as what’s happening in Europe.  In the long run, we think that the trouble there may raise prices here as money looks for a safe harbor, but that may take awhile for the market to realize that. The main reasons for the stock market increase here are still in place, but some of that reasoning has come under attack with the dollar starting to rise and commodities dropping. Some of the main reasons have been the lower dollar and higher price for commodities. The main reasons, though, are still in place; the interest rate is still near 0, and the Fed is still printing money by the truck load. Until that stops and interest rates start moving higher, this Bull market should continue. With that said, let’s look at our spreads tonight. MAY POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50
RUT	Bull Put	630-620		15	.45
AAPL	Bull Put	230-220		15	.35
RUT	Bull Put	680-670		15	.50

PROFIT OF

$   2,700.00

OEX 500-490 BULL PUT SPREAD (15 contracts) OEX CLOSED AT $332.45 Today (32.48 points away from our put spread) Profit potential of $50.00 per contract
Contingent Stop Order set at $502.50
What one day gives us two days take it away, though we still have a good cushion here it is something we’re going to be watching. As we look at the chart OEX dropped through some support and sitting on another support line tonight. We still have another line of support to go through before we really need to worry here.

RUT 630-620 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $698.58 Today (68.58 points away from our put spread) Profit potential of $45.00 per contract
Contingent Stop Order set at $635.00
RUT 680-670 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $698.58 Today  (18.58 points away from our put spread) Profit potential of $50.00 per contract
Contingent Stop Order set at $685.00
As the market drops we’ll see if 690 will hold as support for the RUT. As we see there will be a war played out as worry is over come by greed over the next few days. Also with the jobs report coming out on Friday may help, with the positive news we got from the ADP report today. We’ll be watching this one as we move through the week. We still have 18 pts before are stop comes into play on our 680 – 670 spread. We maintain a large cushion on the 630 - 620 spread.

  AAPL 230-220 BULL PUT SPREAD (15 contracts) AAPL CLOSED AT $255.98 Today (25.98 points away from our put spread) Profit potential of $35.00 per contract
Contingent Stop Order set at $232.50

Looks like AAPL is trying to fill its earnings gap here today, it still has a ways to go before it gets there. It’s a good thing that our spread is well below the gap, as gaps are good support lines, and stocks tend to bounce off their gaps after their filled, we’ll see if AAPL is one of those stocks. We’re sitting fine here so far so we’ll just keep are eyes on it for now.

  We hope are new charts are easier to read and as we move on we’ll be adding more information to them again Thank You for your patience. As always, Trade Happy and Trade Smart

Spread Update

  Investors sent stocks up Monday after getting a boost of confidence from the latest economic reports and Warren Buffett's defense of Goldman Sachs. Giving Goldman a much needed break, from the government beating its been taking.

  The Dow Jones industrial average rose 143 points for its biggest gain in two and a half months. The Dow and broader indexes all climbed more than 1 percent. The market rebounded from a drop Friday after a string of welcome news eased some of the concerns that have been dogging investors. Economic reports signaled that consumer spending and manufacturing are strengthening.

  An agreement by United Airlines to acquire Continental Airlines Inc. in a stock deal worth about $3 billion also lifted stock prices. Investors see corporate dealmaking as a positive sign for the economy.

  "The merger in the airlines is great. As you begin to see mergers that means there is value out there," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group. Traders funneled money to retail and restaurant stocks after the Commerce Department said that personal spending rose 0.6 percent in March, the biggest increase in five months. However, personal income rose just 0.3 percent. The reports were in line with analysts' expectations but showed that consumers were pulling money from savings to make purchases. Manufacturing continued to show broad improvement. Orders have been flowing to factories for months while companies rebuild depleted inventories. The Institute for Supply Management said that U.S. manufacturing activity expanded last month at the fastest pace in nearly six years. The trade group's manufacturing index rose to 60.4 in April from 59.6 in March. Economists expected a reading of 60.

  The market has swung over the past week on investor indecision about the risks that face the economy. Economic numbers and concern about government debt loads in Europe are making traders quick to jump in and out of stocks. The Dow has risen or fallen by more than 100 points in four of the past six days. Stocks bounced higher after a disappointing end to April. The market had tumbled Friday following mixed economic reports and concerns about a possible criminal investigation of Goldman Sachs. The government reported the nation's economy grew at a slower pace in the first quarter than had been forecast and a report on consumer sentiment showed a drop in confidence in April.

  The Dow rose 143.22, or 1.3 percent, to 11,151.83, its biggest point and percentage gain since Feb. 16. It was the fourth largest increase of the year. The broader Standard & Poor's 500 index rose 15.57, or 1.3 percent, to 1,202.26, and the Nasdaq composite index rose 37.55, or 1.5 percent, to 2,498.74. Bond prices fell after demand for safety holdings eased. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.66 percent late Friday.

  The dollar rose, while gold climbed.

  Crude oil rose 4 cents to $86.19 per barrel on the New York Mercantile Exchange. Traders watched developments of the Gulf oil spill. There are concerns that the fallout from the April 20 accident could disrupt supplies and refining capacity. That would drive the price of oil higher and could hurt the economy.

  European markets were volatile after the European Union and the International Monetary Fund agreed to provide Greece with $145 billion over the next three years to help it with its ongoing debt problems. European shares fell but closed higher after U.S. stocks rose.

  Some investors are still skittish about Greece's ability to get its debt problems under control and the potential for other European nations to face similar issues. The euro fell against the dollar.

  Shares of Goldman Sachs rose $4.30, or 3 percent, to $149.50 after Buffett said over the weekend that he doesn't think the investment bank committed fraud. The SEC has accused the company of fraud in a deal involving mortgage securities deals it set up. Goldman has denied wrongdoing.

  We have 2 big reports coming out this week all revolving around jobs on Thursday and Friday both will be market movers so we’ll be keeping are eyes on them. We also have earnings coming out though most of the big hitters have reported. Today's Economic Reports

Date	ET	Release	For	Actual	Consensus	Prior	Revised From
May 6	8:30	Initial Claims	05/01		435k	448k
May 7	8:30	Nonfarm Payrolls	Apr

MAY POSITIONS

STOCK	TYPE		STRIKES	CONTRACTS	CREDIT	CLOSE
OEX	Bull Put	500-490		15	.50
RUT	Bull Put	630-620		15	.45
AAPL	Bull Put	230-220		15	.35
RUT	Bull Put	680-670		15	.50

PROFIT OF

$   2,700.00

OEX 500-490 BULL PUT SPREAD (15 contracts) OEX CLOSED AT $547.05 Today (47.05 points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $502.50

We had a great day with OEX as it moved with banking stocks higher, Goldman Sachs moved higher on Warren Buffet’s statements made earlier today. With close to a 50 point cushion we’ll sit back and watch as we make money on this one RUT 630-620 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $732.82 Today (102.39 points away from our put spread) Profit potential of $45.00 per contract Contingent Stop Order set at $635.00 RUT 680-670 BULL PUT SPREAD (15 contracts) RUT CLOSED AT $732.82 Today (52.82 points away from our put spread) Profit potential of $50.00 per contract Contingent Stop Order set at $685.00

As we move into this week RUT also moved higher which makes both are spreads in the RUT sitting well going into this week.  We have over 53 points of breathing room in our newest spread and 102 points in the other. Let's just sit back and see if we can get a nice recovery heading into the weekend. AAPL 230-220 BULL PUT SPREAD (15 contracts) AAPL CLOSED AT $266.35 Today (36.35 points away from our put spread) Profit potential of $35.00 per contract Contingent Stop Order set at $232.50

It certainly has been a wild ride for Apple continues for the start of this week it has moved in a positive direction adding to a cushion, we're still sitting in good shape in this put spread for now.

  We are missing are charts today as we learn how this new system works we will be adding them as are learning curve continues to rise Thank you As always, Trade Happy and Trade Smart