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

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

NEW TRADE ALERT

Union Pacific Corp.

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

Sell 20 June 115 Puts

Buy 20 June 110 Puts

Total Credit Per Contract $ 0.85

Potential Profit $1,700.00

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

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

MAY SPREADS

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

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

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

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

Trading Plan IF
WYNN falls to $96.00

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

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

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

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

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

JUNE SPREADS

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

As always, Trade Happy and Trade Smart

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

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

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

MAY SPREADS

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

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

Trading Plan IF
WYNN falls to $93.99

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

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

OPEN JUNE WYNN BULL PUT SPREAD (20 contracts)

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

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

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

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

JUNE SPREADS

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

As always, Trade Happy and Trade Smart

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

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

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

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

MAY SPREADS

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

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

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

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

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

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

Trading Plan IF

WYNN falls to $93.99

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

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

OPEN JUNE WYNN BULL PUT SPREAD (20 contracts)

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

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

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

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

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

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

JUNE SPREADS

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

As always, Trade Happy and Trade Smart

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

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

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

Trading Plan IF

WYNN falls to $93.99

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

Buy 20 May 95 Puts (ones we previously sold)

Sell 20 May 90 Puts (ones we previously bought)

This will be closed for a loss.

OPEN JUNE WYNN BULL PUT SPREAD (20 contracts)

Sell 20 June 90 Puts

Buy 20 June 85 Puts

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

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

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

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

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

MAY SPREADS

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

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

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

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

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

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

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

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

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

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

JUNE SPREADS

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

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

As always, Trade Happy and Trade Smart

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

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

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

MAY SPREADS

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

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

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

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

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

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

JUNE SPREADS

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

As always, Trade Happy and Trade Smart

Last week seemed like it couldn’t end fast enough. Even though the Dow and the S&P 500 were racing to new highs, we were faced with challenges in two of our spreads. The RTI earnings caused a sell-off of nearly 15% and GS came within $0.36 of our stop loss.

While we were forced to roll the RTI spread out to June, Goldman Sachs bounced off support just like we anticipated. We now have a comfortable cushion in this spread. Meanwhile, Google gave us an excellent opportunity of turning our Bull Put Spread into an Iron Condor. This let us bring in a little extra premium for the same maintenance. It’s always great to increase our return on money already tied up.

This brings us to our biggest decision this week. What to do with our Wynn spread? We have earnings being announced after the closing bell on Monday. While we are all very gun-shy after living through the RTI announcement last week, we have to keep in mind that we are comparing apples and oranges.

On Wynn, we believe that the earnings have already been priced into the stock price. Last week we saw Wynn’s price fall as its competitors released earnings. Based on fundamentals we think that Wynn is the superior stock in the gaming sector. On the chart, it has also fared the best. Due to these factors and the 7-point cushion, we are going to keep this spread intact. However, if we see anything that would change our mind on Monday, we will send out a Trade Alert.

Just as we said last week on RTI, if any of you are uncomfortable holding over earnings, close out the spread on Monday. You should be able to lock in a profit of $150 by taking the risk off the table.

We heard from a few members that did not roll over their RTI spread last week. If you are one of them, we have three strategies for you to consider. With all three of these scenarios, keep in mind that the longer you wait, the more time decay will take place in your current spread. This should decrease your current loss, as long as the stock price moves sideways or up.

• Strategy #1 Close out current spread for loss and open up a June 90-85 Bull Put Spread. This straight roll over gives you more time for the stock to move to or above $90. Understand that this is more of a directional strategy where you need the stock price to move up for you to profit. We give this a 20% chance of success.

• Strategy #2 Close out current spread for a loss and open a June 85-80 Bull Put Spread. This requires less of a move in the stock price and will give you close to a break even profit potential on the roll over. We give this a 40% chance of success.

• Strategy #3 Close out current spread for a loss and open a June 80-75 Bull Put Spread. This is more conservative, but is the only option that is truly more of a non-directional strategy. We give this a 64% chance of success.

The strategy you choose needs to be based on your own risk parameters. We like to give it the sleep test. Which of these will allow you to sleep good at night? Keep in mind that we will only be managing the roll over that we did last week……..Strategy #3.

Below in the June Spread area, we list two separate profit potential’s for RTI. The first one is a Current Loss for the roll over from our May spread. The second one the Potential Profit for members that were not in the May spread originally. Since these members did not roll over a position, they have a positive profit potential on the June spread.

You might have noticed that the Current Loss that we listed on Wednesday’s newsletter was incorrect. This number should have been -$2,300. Because this number will vary from member to member, we use the figures provided by our Auto Trade Partners. We send the Trade Alerts to these partners at the same time that they go out to all of our members. After these orders are filled for our members, the Auto Trade Partners then send us an average of all their fills. The following are the fill numbers for the RTI roll over.

Original Credit on May Spread (entered 04/18/07) $ .98
Loss on closing out May Spread (entered 05/01/07) $3.32
New Credit on June Spread (entered 05/01/07) $1.19

Current Loss for Roll Over $1.15
Multiplied by 20 Contracts $2,300.00

We apologize for any confusion this might have caused in last week’s newsletter. We take our track record very seriously. The whole premise for starting this website was to let other traders/investors in our trades each month and profit along with us. For this reason, we feel that it is imperative that our trading results are achievable by all our members. While there will always be some variation, hopefully you are able to have very similar results.

MAY SPREADS

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

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

Google is sitting perfectly in the middle of our Iron Condor. We have nice support below it along with the 50 day moving average at $462. On the upside we have plenty of resistance. Our goal is for it to stay in between $450 and $500 and then we can profit on both sides.

WYNN 95 - 90 May Bull Put Spread (20 contracts entered on 04/23/07)
Potential Profit $1,300.00We mentioned our thoughts on Wynn Resorts above. The important thing is for you to decide what your risk tolerance is and then trade accordingly. If anything changes our strategy on Monday, we will send out a Trade Alert.

GS 220 - 210 May Bull Put Spread (10 contracts entered on 04/26/07)
Potential Profit $1,700.00We had to use a lot of patience on this spread but it paid off. GS has bounced off its 20 day moving average and made another all-time high. We now are sitting comfortable going into the last two weeks of this options cycle.

UNP 110 - 105 May Bull Put Spread (20 contracts entered on 04/26/07)
Potential Profit $1,000.00
Union Pacific has also bounced of its 20 day moving average and is working its way back up the chart. We mentioned last week our thoughts on UNP’s fundamentals and think it has good momentum going for it. We now have over a 6-point cushion.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss on Roll Over -$2,300.00
Potential Profit For Non Roll Over $2,380.00

We made the difficult decision last week to roll this out to June. We now have a lot of time for it to work its way back up the chart. With strong support at $80, we are going to sit back and let time tic away at this one.

As always, Trade Happy and Trade Smart

Another day…….another record close for the Dow. This marks the 21st out of 24 trading days that the Dow moved up. Meanwhile, the S&P nearly reached the 1,500 point barrier for the first time since 2000.

The bulls were helped by a strong Commerce Department report that showed U.S. factory orders rose 3.1 percent in March. This was the largest increase in a year and ignited a flurry of buying until the final hour of trading.

This week has certainly been tough on our spreads. While many of you took the option of taking a profit on RTI before the earnings announcement, the rest of us were forced to roll it out to June. At the same time, our Goldman Sachs spread took on water Tuesday but recovered nicely today. The rest of our spreads are sitting with cushions but we have events coming up that will take some careful navigating to get through (discussed in detail below).

While it’s easy to sit and look at the cup half empty, let’s take a look at an opportunity that presented itself today. With Google finishing lower on such a strong up day, it has opened the possibility of making our put spread into an Iron Condor. Its recent price action suggests that it will drift sideways for the next few weeks.

As most of you know, the advantage of making this spread into an Iron Condor is that if you are already in the put spread, you can now enter a call spread on Google without having to allocate more funds to the trade. Instead, your broker will use the maintenance dollars from your put spread in order to cover your call spread. The key is to enter the call spread for the same number of contracts, the same 10-point spread, and the same month of expiration.

On the open tomorrow, we are entering the following call spread on Google (below). We are going to use a limit order for 0.45 on 10 contracts. This way we make sure that we get that price or we don't enter the spread. Because we already have the put spread, we are just looking to make some extra money if the credit is worth the risk. If not, we don't make the trade.

NEW TRADE ALERT

GOOG CALL SPREAD

Sell 10 May Calls at 500 strike price

Buy 10 May Calls at 510 strike price

Total Credit .45 per contract

Potential Profit $450.00

MAY SPREADS

GOOG 450 - 440 May Bull Put Spread (10 contracts entered on 04/23/07)
Potential Profit $900.00
Google was our weakest spread today as it fell over three points when the Nasdaq was up 26.31. This is certainly a sign of weakness. However, GOOG is in the area of strong support with its 50 day moving average at 462.68. While our cushion has dropped to 15 points, we have multiple layers of support and don’t see it getting to our strike price very easily.

WYNN 95 - 90 May Bull Put Spread (20 contracts entered on 04/23/07)
Potential Profit $1,300.00
Wynn Resorts is another stock that we are going to have to trade carefully. On Tuesday, WYNN scheduled its earnings release for Monday, May 7th after the close. While the stock shot up like a rocket during the day, it ran into problems in-after hours trading. After the close, competitor LVS announced disappointing earnings, which caused WYNN to drop. However, later in after-hours, WYNN climbed back up to finish at $105.25.

For now, we want to make it through the weekend to let time decay erode. We will then evaluate where we sit this weekend and come up with a plan for Monday.

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

We took a little heat on this spread on Tuesday when it fell to within .36 of our roll over number of $214.99. However, it then bounced off its 20 day moving average. We saw a nice move in it today as it closed just under our strike price. We are still leaving our plan in place in case it falls again. Keep in mind, the longer we can hold this position intact, the better off our accounts.

Trading Plan for GS
IF it falls below $215.00

Buy 10 220 May Puts (ones we previously sold)
Sell 10 210 May Puts (ones we previously bought)

Sell 10 June 210 Puts
Buy 10 June 200 Puts

You will take a loss on closing out the current spread, but then take in a new credit on the June spread which should offset the loss. We suggest using market orders to get filled quickly.

UNP 110 - 105 May Bull Put Spread (20 contracts entered on 04/26/07)
Potential Profit $1,000.00
Union Pacific bounced back today and closed up $1.20. It is now trading $3.42 over our strike price and above good support. Coming off of excellent earnings and rolling out a new strategic plan (on improving service and asset allocation), we feel that we’re sitting fine on this one.

JUNE SPREADS

RTI 80 - 75 June Bull Put Spread (20 contracts rolled over on 05/01/07)
Current Loss For Roll Over $1,060.00
Potential Profit For Non Roll Over $2,380.00
It still hurts just talking about RTI. Despite nearly doubling earnings from a year ago, RTI fell hard on Tuesday. While we were prepared for a drop of several percentage points, this selling of 14.3% was quite extreme. We knew the risk going into it and we felt that we were in good shape to make it out unscathed. Obviously that’s not what happened.

A day later, we still feel that it was extremely oversold. Today an analyst from Banc of America agreed and lifted his rating on RTI to a “buy” with a $99 price target. The stock responded nicely by moving up $3.80 on over 2 million shares. While we wouldn’t be surprised to see RTI test the support at $80 again, we believe that it will start working its way back up. Remember that we have a lot of time left on this spread so let’s sit back and let it work for us. For those new members that moved into it as a new trade, you should have a nice profit potential on this trade.

As always, Trade Happy and Trade Smart

Trade alert announced........................................

RTI International (RTI)

Closing Current Spread

Buy 20 May 90 Puts (ones we previously sold)

Sell 20 May 85 Puts (ones we previously bought)

Opening New June Spread

Sell 20 June 80 Puts

Buy 20 June 75 Puts

We suggest using market orders to get filled quickly.

The market fell today as April came to an end. We had very low trading volume in part because May 1st is a holiday in most countries. This caused many traders take the day off to get a four day weekend. We also had a couple of reports that came out today that traders weren't pleased with. These reports showed that the consumer may be tapped out…… but this rumor has been running around the market for years.

We did see an improvement on the inflation side as the Commerce Department’s report showed that core inflation was only up by 2.1% over the past 12 months. This strikes us as funny that the market reacted the way it did. The Street wants a weaker economy yet when the data shows this, they take it down. The weaker core inflation numbers may pave the way for a Fed rate cut in the future. For the most part, this down turn was from low volume and month end selling as traders look ahead for the reports coming out later this week.

As most of you have noticed today, two of our spreads dropped to or below our strike prices. These two spreads are Goldman Sachs and RTI International.

GS 220 - 210 May Bull Put Spread (10 contracts entered on 04/26/07)

GS came under pressure early today only to bounce off its early morning lows and spend the rest of the day running sideways. Late in the day, selling came in and GS dropped down to finish $1.50 under our strike price.

We are standing at strong support and we see a bounce in the near term. But as always, we need to have a game plan in case a worst case scenario comes up. As things stand, we could roll our 220 - 210 put spread to a June 210 - 200 put spread and still remain profitable. This adds 10 points to our spread but also adds four weeks to the position.

We still are bullish on GS and we should see an earnings run in late May. Another thing we need to keep in mind is that it’s early in this cycle and we do have a lot of time to watch if GS moves back into its trading range. For this reason we're going to sit tight and see what happens going forward. If GS doesn't start moving in our direction, we will go ahead and roll the spread to a June 210 - 200 put spread IF the price on the stock drops below 215.

Trading Plan for GS
IF it falls below $215.00

Buy 10 220 May Puts (ones we previously sold)
Sell 10 210 May Puts (ones we previously bought)

Sell 10 June 210 Puts
Buy 10 June 200 Puts

You will take a loss on closing out the current spread but then take in a new credit on the June spread which should off set the loss. We suggest using market orders to get filled quickly.

RTI 90 - 85 May Bull Put Spread (20 contracts entered on 04/18/07)

RTI came out with earnings after the bell and they we're great for the most part. As of the end of after hours trading, RTI closed at $94.27. It had been trading lower in after hours so this closing price may be deceptive to where it may open tomorrow. This too we are going to play a wait and see approach. We will monitor this one and if we need to do anything with it we will send out a Trade Alert.

There's one thing that we want everyone to understand and keep in mind. It’s still early in this cycle and there is still a lot that can happen. Keep a close eye on your email for any Trade Alerts.

As always, Trade Happy and Trade Smart

CURRENT MAY SPREADS

RTI 90 - 85 May Bull Put Spread (20 contracts entered on 04/18/07)
Profit Potential$1,600.00

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

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

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

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