Agora Outlook

Publisher Ken Davidson                                                                                                                     Fax 250-860-2051
e-mail davidson@silk.net                                                                                                          www.agoraoutlook.com

                                                                  April Expiration                 April 16th 1998

Davidson’s View

The past few months I have noticed a big change in the S&P 500 cash index that I believe is saying something to us about the market overall. The S&P 500 cash index is used strongly by institutions and "us," to sell options either for hedging portfolios or selling to the public. The index option spreads looked no different than the S&P 100 except the Put prices were much tighter together. You could tell that by how tight they were between strike prices. For example, a 1300 put may have a bid/ask of $5.00 and $5.25 and a 1295 put may have a bid of $4.75 and $5.00. Spreads are always hard to get because of this. The close prices are easy to understand when there is risk arbitrage going on.

Calls, on the other hand, always had nice spreads. For example, a 1300 Call may have a bid/ask of $5.00 and $5.25 but the next strike, 1305 would have a strike of $4.00 and $4.50. As you can see, this spread could be filled for an automatic .50, selling the bid price and buying the ask price. The closer you would get to the index level, the bigger the credit would be, the further away it would shrink. Put prices, on the other hand, were so tight we had to apply volatility numbers, contract availability, etc. to go after spread prices.

I have noticed the last few months that Call prices have been slowly shrinking together and are looking like Puts. This past month was one of the worst. Besides prices being so tight, almost all of the strikes were 25 points apart. Because of the strange action of the S&P 500 we have had to trade the S&P 100 options more to find decent trades. It is hard to say what this is all about but institutions may be selling a lot of Calls in anticipation of the market building a long-term top. We will continue to monitor the situation to see if it is just an aberration or if the structure of the index is truly changing.

This week there was an interesting change in the overall look of the market as the advance/decline line finally began to turn up, cyclicals took over from technology stocks and the Russell 2000 rallied quite strongly. The short-term treasury bill rate has eased in the wake of the Euro interest rate cuts last week to 4.27%. When the t-bill rate drops under the discount rate, as well as the fed funds rate, it has traditionally been a healthy sign for impending expectation of Fed action. Typically, the biggest beneficiaries of lower interest rates have been small cap stocks because they need lower short-term interest rates to push the public's money out of their safe haven and start them easing back into cheap stocks. The only "cheap" stocks are small caps, or the mundane basic industry stocks such as the stocks in the Dow. Because of that we have seen the Russell 2000, and the Dow outperforming the Nasdaq Composite and the S&P 500 in the last few days. This was also the nature of that last rally in the 2nd and 3rd week of April 1998. Almost exactly, the Dow and the Russell 2000 indices were playing catch-up with the S&P 500 and Nasdaq Comp, and making beleaguered investors think their time had come. So far, the rotation out of technology was beneficial to stocks across the board, although money remained with the leaders. Caterpillar, Alcoa, Boeing and finally JP Morgan, helped to push the Dow higher this week.

While the sudden emergence of the cyclical stocks and the day's positive breadth numbers, at first glance, point to a broadening of the rally, I wouldn't be too quick to jump the gun. Rather than a broadening of the rally, the move to the cyclicals will more likely prove to be a case of sector rotation, with the former leaders (the oils, drugs, tech stocks, and speculative Internet issues) entering a declining phase while the cyclicals rally. Rather than a broad based advance, the market will likely continue to be led by a narrow group of stocks.

Likewise, I wouldn't get too excited by the recent strength in the Russell 2000, for here too, looks can be deceiving. While the Russell is often regarded as a barometer of the small cap sector, a quick glance at the top companies by market cap in the index shows such large cap names as CMGI, E-Trade, and Real Networks, among others. The top 5 companies in the index exert the same influence on the index as the top 5 companies in the Nasdaq 100 do on the Nasdaq’s day to day moves. A large part of the Russell's recent move is directly attributed to its top 5 stocks, which have been on a tear of late. Strip out these 5 stocks, and the picture painted by the Russell does not indicate the beginning of a small cap rally.

For this coming May expiration cycle it appears that if money continues to pour into the small caps and out of the big caps the market should be relatively flat. We will likely continue to see new highs in the major indexes, as a market never just turns down from new highs. This will be perfect for us to be able to get into both the upside and downside trades for this month! In the past, May has generally been a flat month for expirations anyhow and with the past six straight up expiration cycles I’m convinced that even if it is an up month it shouldn’t be very strong. What we will be watching closely is the occurrence of a possible strong correction this month. Program numbers for this coming month are revealing that we could see a bit of a correction but we will have more about that in an E-mail ALERT sent out for trades Monday.

Technically

In the short term, most indicators are oversold and moving higher but daily indicators such as Stochastics, Relative Strength and Momentum are just starting to move lower. The Mclellan Oscillator is now in overbought territory moving over the +100 level but with the Summation index just going over the zero line the oscillator could move to +200 before giving a solid overbought signal. We also have a similar divergence in the Arms indicators. The 5-day Arms indicator is quite oversold but the 10-day is still in overbought territory. As long as the advance/decline line can continue to move higher, the 10-day Arms indicator will likely become oversold quite quickly. One indicator that could be on the rise is the volatility index. The past week has seen the index rise up to its moving average and with the market at all time highs we could see some volatility to the downside.

Bob Rack of Schaeffer's Investment Research had a key contrarian options-related indicator flashing bullish last week. The put-call ratio in S&P 100 options hit 1.68:1, with the index up 1.1% and 0.99%, respectively. Rack reports that out of the 32 previous times in the 1990’s that the single-day ratio exceeded 1.6 with the market gaining on the day, the OEX has averaged a 4% gain over the next month. When the day's gain has been greater than 0.5%, the subsequent OEX monthly gain has been 5%. What's more, the only time in this decade that before Wednesday the ratio topped 1.6 with an index gain of more than 1% was in October 1998. The OEX went on to jump 6.5% in the next month. The 10-day OEX put/call ratio is extremely bullish. This ratio is calling for at least another 3-4 weeks of rally.

There seem to be many different opinions on the market right now. The bulls are very bullish and the bears are very bearish. It’s interesting how people can look at the same technical indicators and come up with different opinions. This is one of the main reasons we trade Credit Spreads since we don’t have to worry that much about the direction of the market. With most indicators at overbought levels it is more likely, however, that the market will at least have a small correction in the coming weeks.

Mclellan Oscillator: 150 -100 oversold +100 overbought
Summation Index: 267

Five day arms: 1.06 and below, overbought 1.00 and above, oversold
Ten day arms:    .88 .80 and below, overbought 1.00 and above, oversold

Bulls: 55.9 previous week 56.49 50% plus overbought/bearish
Bears: 30.5 previous week 31.6 50% plus oversold /bullish
Correction: 13.6 previous week 12.0

Five day Qvix: 25.15

 

Economic Effects

Tuesday

Consumer prices rose mildly in March, despite a deal among oil-producing countries that sent energy prices sharply higher. The Consumer Price Index, the main inflation gauge, increased a seasonally adjusted 0.2% after a 0.1% rise in February. The core CPI, which removes volatile food and energy costs, increased a mere 0.1%, matching the rise in the prior month.

The report showed that inflation, which has been barely visible over the past few years even as the economy has grown vigorously, was even more subdued than expected in March. Economists in a Reuters survey had projected a 0.3% rise in the CPI and a 0.2% gain excluding food and energy.  Following a year-long slump in oil prices, Organization of Petroleum Exporting Countries, or OPEC, clinched a deal aimed at shoring up profits through severe cuts in oil output. The CPI showed domestic energy costs soared 1.6%. Among the major components, gasoline prices recorded the steepest rise, climbing 3.7%. Fuel oil prices increased 0.9%. Outside the energy sector, most prices showed only small or no increases in March. Food prices fell 0.2%, new vehicle costs eased 0.2% and medical care prices increased 0.2%. But airline fares, an extremely volatile category, jumped 4.7% last month. In the year ended in March, the CPI was up just 1.7%. Excluding food and energy, it was up 2.1%.

Sales at U.S. retail stores rose modestly in March after the strongest month in five years during February, the government said Tuesday in a report that reflected still-healthy shopping. Total sales at retail stores increased by only 0.2% to a seasonally adjusted $239.6 billion last month, but it followed upwardly revised jumps of 1.7% in February and 1.3% in January. Previously, Commerce said February sales had risen by 0.9% and January sales by 1%. The revised February sales increase was the strongest since a matching 1.7% rise in February 1994.

Sales by automobile dealers, which account for one quarter of monthly retail business, dropped 0.5% last month to $60 billion, a reversal from February when they had soared 3.1%. Excluding autos, overall retail sales in March were up 0.5% after a 1.3% February rise. Building material sales also fell in March, down 0.4% to $15.5 billion after a 3.9% jump in February. There have been signs that homebuilding is leveling off, though at a healthy rate. But sales at merchandise stores climbed 0.7% to $31.6 billion last month on top of a 0.5% February gain. At gasoline stations, where prices have been increasing sharply, sales shot up 1.5% to $12.6 billion after being flat in February.

Vigorous consumer spending was a key factor propelling the economic growth rate to a 6% annual rate in the final three months of last year, the strongest quarterly growth in 2-1/2 years. With the economy in its ninth year of unbroken growth, analysts anticipate some slowdown this year, largely on the basis of an easing in spending and less business investment. So far in 1999, though, consumer spending which fuels two-thirds of economic growth remains well supported by ample job opportunities and by gains from a booming stock market. That has bolstered consumer optimism about the future and kept new car buying home sales, and construction relatively strong, bringing into question when and by how much the economy will slow.

Wednesday

Businesses added to their stock of goods on hand more vigorously than anticipated in February to meet strong demand, a Commerce Department report showed.  The value of total inventories at retailers, wholesalers and manufacturers increased 0.4% to a seasonally adjusted $1.091 trillion after being unchanged in January. That was twice as strong as economists' forecasts for a 0.2% increase in February inventories and implied first-quarter economic growth was getting a boost from the build-up in goods. The department said it was the strongest monthly addition to inventories since a matching 0.4% rise last November.

Businesses clearly expected steady demand for products from new cars to food and clothing. Sales by all three levels of business during February climbed 0.9% to a seasonally adjusted $799.27 billion, rebounding from a 0.2% decline in January. Robust sales kept the inventory-to-sales ratio at a lean 1.37 months' worth in each of January and February. That is as low as the ratio has ever gone since the government began collecting the monthly data in 1980 and indicated little chance of an excessive pileup in unsold goods.

Auto inventories increased during February by 1.4% to $94.78 billion after a 0.6% rise in January. It was the largest monthly increase to auto inventories since a 1.8% jump last November, reflecting booming new car sales that caused carmakers to produce more of their most popular models for dealers' lots.

Thursday

New claims for jobless benefits jumped unexpectedly by 14,000 last week to their highest level in three months. The Labor Department said first-time applications for state unemployment insurance benefits rose to 316,000 in the week ended April 10, up from a revised 302,000 in the prior week, and well above analysts' expectations of 292,000.
Claims were at their highest since January 9 when they stood at 358,000. Last week's figure also marked the end of the longest run in more than 25 years of claims coming in under the key 300,000 mark. Claims had remained below 300,000, a sign of a thriving job market, from January 30 through March 27, the longest stretch since July 22, 1972 through December 15, 1973. The level of initial claims, which gives an early reading on the resilience of the labor market, had fluctuated in a narrow range of 284,000 to 302,000 for 11 weeks, adding to a picture of a robust economy churning out new jobs.
The claims figures were consistent with other reports showing confident consumers, buoyed by a booming stock market and ample job opportunities, were still supporting the economy in its ninth year of unbroken expansion since the last recession in 1990-91. Continued claims, filed by people who already qualify for state jobless benefits, rose to 2.22 million for the week ended April 3, the latest for which that data is available.
The closely watched four-week moving average of initial claims, another reliable barometer of labor market trends, also rose to 300,500 in the week ended April 10, up from 296,250 in the prior week. Economists tend to favor the four-week average as an indicator of job market health because it irons out weekly fluctuations caused by holidays and seasonal factors.
 
Friday

New home building grew at a slower rate during March for a second straight month as the housing market showed signs of leveling off. Total starts fell 1.3% to a seasonally adjusted annual rate of 1.766 million units after a 1.6% drop in February. Starts have slowly been settling after soaring to a 12-year peak at a revised 1.820 million a year in January. They were well above economists' forecast for a sharper decline to an annual rate of 1.72 million. Signs the housing market has not cooled off as many forecasters were expecting unsettled inflation-sensitive bond markets and prices inched down after the number's release.

The average monthly starts rate in the first quarter this year of 1.792 million units a year remained well ahead of last year's fourth-quarter average of 1.701 million, boosted by the strong economy and robust consumer confidence. But in a sign that home building was losing some sizzle, new applications for permits dropped 6% in March to an annual rate of 1.636 million a year, the biggest drop in permits in more than four years, since an 8.2% plunge in January 1995.

Mortgage rates for a 30-year loan moved up to 7.11% in the second week of March, the highest since May 1998. As well, the Labor Department's March unemployment report showed that the construction industry shed jobs so some falloff in building was anticipated. The decline in March housing starts was uneven. In the Northeast, there was a 28.9% drop from February's building rate to 150,000 and in the South starts fell 4.3% to 821,000 a year. But in the Midwest, March starts were up 12.7% to an annual rate of 400,000 and in the West they increased 7.9% to 395,000 a year.  Output by the nation's mines, factories and utilities barely edged ahead in March as businesses operated at their slowest rate in more than 8-1/2 years.

Industrial production increased a slower than expected 0.1% last month after a 0.3% gain in February. But industry operated at only 80.1% of its maximum capacity, the lowest since a matching 80.1% in June 1992 in a sign that there was little pressure on prices from the production side of the economy. Analysts said economic frailty overseas still was hurting U.S. business by sapping foreign sales.

The markets showed little direct reaction to the production data, which did not alter a perception that the Federal Reserve was likely on hold on its interest-rate policy with few signs of inflation pressure. Bond prices were off modestly, as the 30-year bond fell 8/32, or $2.50 per $1,000 of face value, and the yield rose to 5.55% from Thursday's close of 5.53%. Stocks were off, with the Dow sinking more than –50.00 points in early trading.

Economists had forecast a slightly stronger 0.2% increase in March output and had predicted the capacity use rate would be a higher 80.2%. The Fed report, however, showed that manufacturing output in March was flat after rising 0.3% in February. Overall, during the first three months of 1999, industrial output advanced only at a 0.7% annual rate, a sharp drop from the final three months of last year when production was surging at an annual rate of 2.2%.

 Next Week’s Economic Statistics

This has got to be the quietest week of the year as the only indicator out is Jobless Claims and that number won’t really matter much to the market unless claims drop dramatically. After this week’s backup in claims it is unlikely to move the market.

MARKET CLOSES

Index

Last Week

This Week

Change

Percent

Dow Jones

10173.84

10484.10

+310.26

3.0

S&P 500

1348.35

1318.88

-29.47

2.2

S&P 500 Futures June.

1358.00

1323.00

-35.00

2.6

S & P 100

681.34

668.40

-12.94

1.9

Nasdaq

2593.04

2482.41

-110.63

4.3

Russell 2000

405.86

421.58

+15.72

3.9

30-Year bond

5.46%

5.57%

                     S&P 100 Expiration Number:
                     S&P 500 Expiration Number: 1324.15
                     S&P 500 Futures April Expiration Number: 1323.00
 

Program Trades

When we started placing this month’s trades it was a slow start but by the end of the April expiration cycle we had ended up placing 17 trades. All but one were profitable and the only reason it saw a loss was because it was being replaced by a safer trade.

Cash trades saw a total of 116% and Futures saw a total gain of 111%. Cash Outright Sells and Strangles saw an average of a 10% gain while the average gain on Long trades was 21%. Ultra trades saw an average gain of 10%. The day before expiration we placed Short trades on the SPX and OEX to see the options expire worthless with gains of 15% and 20%. Pretty good profit for only holding the trade for one day.

Futures trades saw Outright Sells and Strangles see an average gain of 25%. Long trades averaged 20% and Ultra trades averaged 14%. The day before expiration we placed a Short trade and received a profit of 20%. It’s always nice to bring in a good profit when you only hold a trade for one day!

The market this month moved basically straight up until the final few days before expiration when we saw the beginging of a correction. The numbers did well in predicting the outside boundaries this month. However, some people got out of the OEX 685/690 Call trade to replace it with the higher 695/700 Call trade just before expiration. We did finish expiration below 685 so everyone’s trades turned out well, anyhow.

May is generally a flat month for cycles but with the market blowing off we could still see new highs at some point this month. More about this in the Program Numbers e-mail ALERT.

**Trades listed below are all for the coming expiration cycle unless otherwise noted. Fill prices are averaged out as reports come in by subscribers being filled.**

Average Entry price

 

Bid

Ask

last

         
 

S&P 500 Cash Trades:

     

May 1200 put $24.00 Bought back for $6.50, profit =$17.50

Strangle Trade

0

0

0

May 1400 call for $8.75

$32.75.

0

0

0

         

1200 sold SPX Put for $11.38

Ultra Trade

0

0

0

1175 bought SPX Put for $8.88

$2.50 credit spread.

0

0

0

         

1375 sold SPX Call for $3.65

Long Trade

0

0

0

1380 bought SPX Call for $2.65

$1.00 credit spread.

0

0

0

         

1310 sold SPX Put for $4.25

Short Trade

0

0

0

1305 bought SPX Put for $3.50

$.75 credit spread.

0

0

0

         
 

S&P 100 CashTrades:

     
         

610 sold OEX Put $5.50

Long trade

0

0

0

605 bought OEX Put $4.38

$.88 credit spread

0

0

0

         

600 sold OEX Put $4.25

Ultra trade

0

0

0

595 bought OEX Put $3.75

$.50 credit spread

0

0

0

         

685 sold OEX Call $3.00

Long trade

0

0

0

690 bought OEX Call $2.00. This trade was bought back for $2.00 providing a loss of $1.00

$1.00 credit spread

0

0

0

         

695 sold OEX Call $2.25

Replaced Long trade

0

0

0

700 bought OEX Call $1.00

$1.25 credit spread

0

0

0

         

700 sold OEX Call $.93

Ultra trade

0

0

0

710 bought OEX Call $.18

$.75 credit spread

0

0

0

         

660 sold OEX Put $2.63

Short trade

0

0

0

655 bought OEX Put $1.63

$1.00 credit spread

0

0

0

         
 

S&P 500 Options Feb. Futures Trades

High

Low

Close

         

Sold 1200 put average $9.75

Ultra Trade

0

0

0

Bought 1195 put average $9.10

$.65 Credit

0

0

0

Some people also sold the 1190 put for an average price of $8.55 for an average of

$1.20 Credit

0

0

0

         

May 1200 put $22.00 bought back for $7.00= $15.00 profit May 1400 call for $9.50

Strangle Trade

$31.50

0

0

0

         

Sold 1220 Put $14.75

Long Trade

0

0

0

Bought 1215 Put $13.75.

$1.00 Credit

0

0

0

         

Sold 1400 Call $1.50

Ultra Trade

0

0

0

Bought 1410 Call $.80

$.70 Credit

0

0

0

         

Sold 1385 Call $14.75

Long Trade

0

0

0

Bought 1390 Call $13.75.

$1.00 Credit

0

0

0

         

Sold 1395 Call $2.20

Short Trade

0

0

0

Bought 1400 Call $1.50.

$.70 Credit

0

0

0

         

Sold 1310 Put $5.00

Short Trade

0

0

0

Bought 1305Put $4.00

$1.00 Credit

0

0

0

         

Copyright 1998. All rights reserved. The information contained in the AGORA OUTLOOK NEWSLETTER is based upon data that is believed to be accurate, but is not guaranteed, and subject to change without notice. All projections, forecasts, opinions, and track records cannot be guaranteed to equal our past performance. Persons reading this newsletter are responsible for their actions. Officers and employees of this publication may at times have a position in the securities mentioned, or related services.

 

Short Trades

Long Trades

Ultra Trades

Outright Short Sales

1999 Current

102%

1999 Current

45%

1999 Current

64%

1999 Current

32%

1998

66%

1998

43%

1998

79%

1998

71%

1997

108%

1997

188%

1997

82%

   
1996

163%

1996

169%

1996

99%

   
    1995

93%

1995

76%

   
    1994

79%

1994

89%

   
    1993

177%

1993

long

   
    1992

112%

1992

long

   
    1991

162%

1991

long

   
    1990

166%

1990

long

   

Futures Trades

Outright Sells & Strangles

Long Trades

Ultra Trades

1999 Current 118% 1999 Current 25% 1999 Current 77%
1998 3 mths. 130% 1998 3 mths. 93% 1998 3 mths. 16%
Cash Option Profits for April

Short Trades

Outright Sells

Long Trades

Ultra Conservative Trades

1310/1305 SPX Puts
.75=15%
Strangle trade. May 1200 SPX puts and 1400 SPX Calls. Puts bought back for $6.50, profit = 10%. May 1400 call still sold.

1375/1380 SPX Calls

$1.00=20%

1200/1175 SPX Puts

$2.50=10%

610/605 OEX Puts
$1.00=20%
 

610/605 OEX Puts

.88=18%

600/595 OEX Puts

.50=10%

   

685/690 OEX Calls

bought back $1.00 loss=20%

700/710 OEX Calls

.75=8.0%

   

695/700 OEX Calls

replacement of the 685/690 trade

$1.25=25%

 
Total 35% Short trades are considered individual trades similar to outright buying so there is no average. Total +10% Total +43%. Long trades are averaged for the record sheet as we normally place both up and down trades. Average 21% Total 28%. Ultra trades are averaged for the record sheet as we normally place both up and down trades. Average 10%

Cash option outright sells margin is calculated with an average margin of $7500.00 per contract and spreads with a $500.00 per contract basis. We do not include interest profits on credit taken. (Margin estimates are based on the average subscribers account requirements.)

S&P 500 Futures Option Profits for March

Short Trades

Outright Sells

Long Trades

Ultra Conservative Trades

1395/1400 Calls
.70=14% 
Strangle trade. May 1200 SPX puts and 1400 SPX Calls. Puts bought back for $7.00, profit =$15.00 or 25%. May 1400 call still sold.

1220/1215 Puts

$1.00=20%

1200/1195 Puts

$.65=13% and

1200/1190 Puts

$1.20=12%

1310/1305 Puts
$1.00=20%
 

1385/1390 Calls

$1.00=20%

1400/1410 Calls

$.70=14%

Total 34% Short trades are considered individual trades similar to outright buying so there is no average. Total 25%. Outright Sells are calculated separately because they can be placed at anytime. Total +40%. Long trades are averaged for the record sheet as we normally place both up and down trades. Average 20% Total 26%. Ultra trades are averaged for the record sheet as we normally place both up and down trades. Average 14%

 

Agora Outlook

Publisher Ken Davidson                                                                                                                                                                                    Fax 250-860-2051
e-mail davidson@silk.net                                                                                                                                                                        www.agoraoutlook.com

                                                                  April Expiration                                                                         April 9th 1998

 

Davidson’s View

Since the recent rally began, the market’s rise has been getting thinner and thinner the higher it has gone, so people have questioned when the rise will end. With the market making a new high this week, the advance-decline line made a new low and the new highs-new lows were pathetic. Stocks that weren't up very much were killed. I think today's action and the complete disconnect between different groups are as weird as anything I have ever seen. I cannot imagine anyone coming to the conclusion that this is a healthy place where people want to have their money parked in stocks right now and this has me worried that the "greed" mentality is starting to come into the market!

Not only are there quite a few technical divergences, a war, an overvalued market, and declining corporate profits, if we just look at what is driving the indexes we learn some important things. Statistics released by Salomon Smith Barney reveal that the recent rise is very scary because there are only a few stocks driving the indexes up. If analysts actually paid attention to fundamentals the market would likely be a lot lower!

76% of all stocks are trailing the S&P 500's return by 15% or more.

93% of all Nasdaq stocks are 10% or more below their 52-week highs.

88% of all NYSE stocks are 10% or more below their 52-week highs.

The advance/decline line for the NYSE peaked in April, 1998, and it continues to sit at lows near the initial October 1998, 4-year cycle low, even with the Dow closing at 10,198 yesterday. The advance/decline line in the Nasdaq market has been declining since 1997.

Many people wonder if the laggards will either pull the big caps down or join in the rally. The A/D line is a concern but the biggest consideration with this overvalued market is what it is that is driving these few stocks higher. So far, it appears that it only takes money pouring into the top 100 stocks for a blow-off to happen. Figures released by AMG Data Services yesterday revealed that it doesn’t matter if the advance decline line were to turn higher. Equity fund inflows over the past week totaled $3.36 billion, with 84% of the money going into large cap growth funds. There is positive liquidity and no one is building cash reserves, so as long as the money continues to come in, the rally should continue with a few sharp corrections along the way until the money dries up or we really start to see the economy slip! It doesn’t look like things will change in the near future but I believe that economic indicators will become important once again if we do start to slow down or we see an increase in inflation.

It looks like the only thing that might start to hurt the market right now, however, is earnings. Corporate profits fell for the first time since 1989. 2.2% for 1998 and recent figures paint a picture of the health of corporate profit growth that is in stark contrast to the belief held by many people of the "new paradigm, new era" economy. Fortune 500 companies’ profits fell 1.8% in 1998, the first decline in 7 years. With all of the money pouring into the select 100 stocks the market has been able to ignore shrinking profits up to this point, but a second quarter profits slowdown in the big name stocks which have led this rally will likely make traders and investors take notice.

Earnings compiler First Call Corp. sees first-quarter earnings for the S&P 500 index growing 6.7% vs. the year-ago quarter, a bit above the fourth quarter's 6.0%. So far, fewer companies have come out with warnings of disappointing first-quarter growth following three quarters chock-full of negative previews. The recent rally we have been in has likely been discounting expectations of good earnings and the market has strangely enough rallied in many of these periods for the last 12 months. However, as the earnings reports finally came out, selling began. Starting next week we could see trouble once again. On Tuesday, Intel is reporting earnings and, for the week, there are 5 of the 30 Dow companies reporting. After the close on Friday, Compaq revealed that that they will not meet earnings expectations. They were expected to make 31 cents a share and will now only make 15 cents. In after hours trading they are down over $4.00. Dell, Gateway, Apple and Intel were all off over $2.00 Friday night. Globex trading starting on Sunday may be interesting at this time. It looks like Monday will start the day sharply to the downside but we’ll send out an e-mail Sunday night to let you know what is happening overseas and what Globex futures trading is doing.

 

Technically

The market began its breakout move on Monday as traders reacted to Friday's employment report and the compressed nature of the Dow and S&P’s. The breakout saw new closing record highs. This close gave the bulls the green light to continue to buy. The S&P 500 now must hold above the key 1315-1324 support level to remain healthy. This does not mean a sharp pullback to support cannot happen. In fact, this type of pullback would be healthy for the market. Technical indicators are overbought both short and long term except the Mclellan Oscillators and Summation index which are giving neutral readings. Relative Strength is overbought and moving lower, cumulative breadth is still declining and Stochastics both short and long term are extremely overbought. The all important momentum indicators have already peaked and started turning lower. With both the 5 and 10-day Arms indexes overbought and the market now at technical resistance it is likely next week should be a down one. At least the start of the week should see some downward pressure. With a closing tick of +985 on Thursday you often see a reversal within one or two days. The only good thing for the market technically this week was that the advance/decline Line moved higher!

Mclellan Oscillator: 59 -100 oversold +100 overbought
Summation Index: 36

Five day arms: .75 and below, overbought 1.00 and above, oversold
Ten day arms: .86 .80 and below, overbought 1.00 and above, oversold

Bulls: n/a previous week 55.9 50% plus overbought/bearish
Bears: n/a previous week 29.7 50% plus oversold /bullish
Correction: n/a previous week 14.4`

Five day Qvix: 23.10

 

Economic Effects

Tuesday

    Businesses stocked shelves while wholesale sales climbed indicating firms were confident of continued strong consumer demand. Total inventories rose 0.6% to a seasonally adjusted $287.73 billion after a 0.4% drop in January. That was well above economists' forecasts for a 0.1% rise in February inventories. Inventories of apparel, which rose 4.7% to a seasonally adjusted $12.24 billion, helped the increase. Wholesalers also stocked up heavily on professional equipment such as computers. Those inventories rose 3.0%. Auto inventories fell 0.5% to $29.01 billion. Total wholesale sales for February rose 1.0% to a seasonally adjusted $217.61 billion.

The inventory-to-sales ratio, which measures how long it would take to totally deplete stocks at the current sales pace, fell to 1.32 months' worth in February from 1.33 months' worth in January. Bonds happily rallied since the report indicated that the economy might be slowing down from its fast paced pick up.  A major U.S. economic forecasting gauge rose for a fifth consecutive month in February, signaling strong economic growth through 1999, a private research group said Tuesday.

    The Index of Leading Economic Indicators, a measure of future economic activity, rose 0.2% in February following a 0.5% increase in January. The February rise matched expectations of economists for a 0.2% gain.

This was the fifth consecutive increase in the leading index, but it shows less breadth than usual, with only four of the 10 components rising in February. However, the overall trend continues to point to strong growth ahead. Changes in the leading indicators index are intended to predict turning points in the business cycle, such as a pick up in growth or a recession. Initial jobless claims and consumer expectations were the biggest positive contributors to the leading index in February. Four components of the index were negative contributors in February, led by manufacturers' new orders for non-defense capital goods and manufacturers' orders for consumer goods and materials. Two components, the average workweek and stock prices, were unchanged.

The report also said the index of coincident indicators, a measure of present economic conditions, rose 0.3% in February after a 0.2% increase in January. The coincident index signals a 3% annual growth rate in the U.S. Gross Domestic Product in the first quarter. The index of lagging indicators, which shows past economic performance, rose 0.2% in February after a revised 0.5% rise in the prior month that was previously reported as a 0.4% increase.

Wednesday

    Consumer credit rose $8.7 billion in February, as the public continued to take on more debt to buy new cars and trucks. The increase, at a 7.9% annual rate, was significantly lower than January's revised 14.1% jump, but the numbers were about what analysts had anticipated. All figures are adjusted for seasonal factors and inflation.

With stable jobs and low inflation, consumer confidence has been strong and continues to be a key component of the current economic expansion. People are borrowing more than they are saving which in the end is not good but one number doesn’t a trend.

Auto credit outstanding grew $5.2 billion in February, after climbing $7.1 billion in January. Auto sales remained robust in February, with sales of cars and light trucks topping 14 million units. February revolving credit, which includes retail and bankcard borrowing, rose $2.3 billion, compared with $6.2 billion in January. Meanwhile, miscellaneous credit, which accounts for mobile-home and cash loans and certain retail financial contracts, increased $1.2 billion, or 0.4%, in February, following a $2 billion, or 0.7%, increase in January.

Thursday

    Jobless claims rose by 11,000 in the latest week. The Labor Department said first-time claims rose to 299,000 in the week ended April 3, up from 288,000 the previous week, and well above the average forecast by economists of 290,000. Overall, the report suggested hiring in the labor market remains robust.

In a sign that the pace of hiring is strong, the number of people who have already collected a week of benefits dropped to 2.156 million in the week ended March 27, its lowest level since 2.102 million in the week ended Sept. 19, 1998. The level of new claims, which gives an early reading on the resilience of the labor market, has held below the key mark of 300,000 for ten straight weeks, the longest stretch since July 22, 1972 through December 15, 1973. Last week, the department reported the unemployment rate for March at 4.2%, the lowest rate since a matching 4.2% in February 1970. The Good Friday holiday, which is not observed in all industries, may have had an influence on the latest jobless claims figures. Seasonal adjustment factors attempt to smooth out peaks and valleys in a series of data by anticipating events like holiday weeks, but they sometimes err because they are based on patterns that occurred in the past. The closely watched four-week moving average, which irons out weekly fluctuations and gives a better indication of the jobs market, crept up to 295,250 in the latest week from 293,500 for the week ended March 27.

    The nation's biggest retailers reported another strong month of sales in March, with the Easter holiday and warmer weather spurring shoppers to stock up on spring fashions. Discounters led the retail pack. Wal-Mart Stores Inc. reported an 11.3% rise in same-store sales, or sales at stores open at least a year. Total sales jumped 18% to $13.89 billion. Same-store sales at its Sam's Club warehouse division were up 11.7%, while total sales climbed 14% to $2.31 billion.

Prices on imports fell 0.4% in March, the biggest drop in seven months, the Labor Department said today. The price of imported Japanese goods fell 0.6% during March, the biggest drop in eight months. The price of goods imported from Asia's newly industrialized countries was down 0.7%, the biggest drop in seven months. Non-fuel import prices were revised to unchanged in February, originally reported as down 0.1%.

For March, the price of all U.S. imports, with fuel included, rose 0.1%, reversing the previous month's 0.1% decline. Export prices fell 0.3% in March, the biggest decline in six months. The market moved lower on this news as rising import prices creates inflation however the news didn’t keep stocks down for long.

Friday

Wholesale prices rose moderately in March despite a jump in energy costs, a further sign that vibrant economic growth was not stirring any worrisome inflationary pressures.

    The Producer Price Index rose 0.2% in March after a 0.4% drop in February. The core PPI, which strips out volatile food and energy costs, was unchanged for the second month in a row. If there is any inflation to be worried about it has been confined to the energy sector. There are no great increases in prices or any danger of inflation, and the inflation rate continues to be completely held under control. The inflation-sensitive bond market welcomed the news, sending them higher. Stocks barely moved on the news.

Economists said the PPI may offer Federal Reserve policymakers further reassurance that there is no need to raise interest rates to rein in the robust economy. The reading on the overall PPI was slightly below the 0.3% increase expected by U.S. economists in a Reuters survey but the flat core PPI matched expectations. The performance of the PPI, which measures prices paid to factories, farms and refineries, was particularly benign in light of sharp gains in oil prices brought about by last month's deal by the Organization of Petroleum Exporting Countries, or OPEC. OPEC, in cooperation with some major non-OPEC petroleum exporters, agreed to slash production in a bid to lift oil prices out of one of the worst slumps on record. The PPI showed a 1.2% gain for all energy goods in March. Gasoline prices increased 3.6%, while heating oil costs rocketed 13.1%, their biggest one-month gain since a 14.7% rise in February 1994. A 1.8% decline in the cost of natural gas helped to offset the large rises among other types of energy goods. Among other components in the PPI, passenger car prices fell 0.5% last month and food costs increased 0.4%. Prices for machinery and other types of capital equipment were unchanged. The oil-price rise showed up much more heavily at the very early stages of production than in the PPI itself, which measures the cost of goods finished and ready for sale to consumers. The crude goods price index, measuring raw materials costs, rose 1.0% in March. Crude petroleum prices soared 27.1%, the sharpest rise since October 1990.

 

Next Week’s Economic Statistics

On Tuesday we get the Consumer Price Index. These numbers have continued to be low so it is unlikely that they will have any effect on the market. We also get Overall Retail Sales figures. Retail figures have been strong the past few months so this month should be no different. If it is lower than expected, retail stocks would likely see a sell off. On Wednesday we get Business Inventories. So far this year we haven’t seen any build up of unsold goods so the numbers should be favourable for the market. On Thursday we get Weekly Jobless Claims. This number has been attracting attention the past few weeks as it continues to record new lows. It has been well below 300,000 for months now and this indicates a tight labour market which is a negative for the market. If we see another downturn in claims, bonds will likely sell off and this may drag stocks down. On Friday we get Housing Starts and Industrial Production Numbers. Housing numbers have been strong so the number will probably be ignored but the industrial production could move the market if capacity utilisation numbers reveal that workers are not being very productive. Low productively means less merchandise with higher wages which means lower profits. This would be a real negative for the stockmarket so this number will probably be the most important number of the week.

MARKET CLOSES

Index

Last Week

This Week

Change

Percent

Dow Jones

9832.51

10173.84

+341.33

3.5

S & P 500

1293.77

1348.35

+54.58

4.2

S & P 500 Futures Dec.

1303.00

1358.00

+55.00

4.2

S & P 100

649.98

681.34

+31.36

4.8

Nasdaq

2493.71

2593.04

+99.33

4.0

Russell 2000

398.74

405.86

+7.12

1.8

30-Year bond

5.69%

5.46%

Program Trades

All of our put trades are indicating only a 2% probability of a loss by expiration next week so we have no intention of getting out those trades. The market was flat most of the week but the huge push up on Thursday put pressure on our OEX Call trades. So far we still have an 86% probability of them expiring worthless so we will continue to monitor them closely as the week goes by to see if we need to exit them early. Below 85% generally means we should exit trades. By the looks of the report out on Compaq late Friday we’ll likely see some strong volatility to the downside early in the week. Premiums on Calls will fall like a stone if we do move lower so we’ll be able to buy the 685 OEX Calls back with profits if needed. The S&P 500 1375/1380 Call trade has a 91% probability of expiring worthless.

*** We will be sending out an ALERT for the May Cash and Futures Strangle but we would like to see the May 1200 Put side of the trade bought back for any price less than $10.00, not above. If the market is going to fall on Monday morning it would be best to set your price to buy it back a little higher than the current ask price to get a quick fill.***

**Trades listed below are all for the coming expiration cycle unless otherwise noted. Fill prices are averaged out as reports come in by subscribers being filled.**

Average Entry price

 

Bid

Ask

last

         
 

S&P 500 Cash Trades:

     

May 1200 put $24.00

Strangle Trade

5.25

6.00

6.00

May 1400 call for $8.75

$32.75.

15.65

16.88

16.75

         

1200 sold SPX Put for $11.38

Ultra Trade

.32

.44

.44

1175 bought SPX Put for $8.88

$2.50 credit spread.

.13

.25

.13

         

1375 sold SPX Call for $3.65

Long Trade

3.25

4.00

3.25

1380 bought SPX Call for $2.65

$2.00 credit spread.

2.38

3.13

1.75

         
 

S&P 100 CashTrades:

     
         

610 sold OEX Put $5.50

Long trade

.13

.25

.13

605 bought OEX Put $4.38

$.88 credit spread

.13

.18

.18

         

600 sold OEX Put $4.25

Ultra trade

.13

.18

.13

595 bought OEX Put $3.75

$.50 credit spread

.06

.13

.06

         

685 sold OEX Call $3.00

Long trade

4.75

4.88

4.75

690 bought OEX Call $2.00

$1.00 credit spread

2.82

2.88

2.88

         
 

S&P 500 Options Feb. Futures Trades

High

Low

Close

         

Sold 1200 put average $9.75

Ultra Trade

.50

.25

.30

Bought 1195 put average $9.10

$.65 Credit

.30

.30

.30

Some people also sold the 1190 put for an average price of $8.55 for an average of

$1.20 Credit

.35

.30

.30

         

May 1200 put $22.00

Strangle Trade

6.50

5.50

5.50

May 1400 call for $9.50

$31.50.

16.50

15.50

16.00

         

Sold 1220 Put $14.75

Long Trade

.75

.40

.75

Bought 1215 Put $13.75.

$1.00 Credit

.35

.35

.35

         

Sold 1400 Call $1.50

Long Trade

1.70

.90

1.20

Bought 1410 Call $.80

$1.00 Credit

.70

.70

.70

         

Sold 1385 Call $14.75

Long Trade

3.40

2.90

3.40

Bought 1390 Call $13.75.

$1.00 Credit

3.10

2.30

2.10

         

Copyright 1998. All rights reserved. The information contained in the AGORA OUTLOOK NEWSLETTER is based upon data that is believed to be accurate, but is not guaranteed, and subject to change without notice. All projections, forecasts, opinions, and track records cannot be guaranteed to equal our past performance. Persons reading this newsletter are responsible for their actions. Officers and employees of this publication may at times have a position in the securities mentioned, or related services.

Agora Outlook

Publisher Ken Davidson                                                                                                                                                                                    Fax 250-860-2051
e-mail davidson@silk.net                                                                                                                                                                        www.agoraoutlook.com

                                                                  April Expiration                                                                         March 26th 1998

Davidson’s View

The coming week should offer a little something for everybody. There is an international conflict going on, the end of the week has a lot of important economic data and the Fed is meeting.

Next week, being a shortened trading week and the end of the quarter on Wednesday, we could see some window dressing taking place. That may be the reason the market held up so well after the initial sell off earlier in the week. Usually, the third and second-to last days are the most powerful.

However, aside from the obvious, there are good reasons to expect the market to struggle to break higher ground over the near term. Interest rates are rising, corporate profits are falling and fewer and fewer stocks are participating in the rise of the major market indexes. The last time the advance/decline ratio was this lopsided to new market highs was back in August 1929. Besides that, the market’s prolonged run up has left both the averages and most individual issues seriously overvalued, not only in terms of their own benchmarks, but compared to bond yields as well. This means that the market will probably continue to struggle and eat up even more premiums in our sold options.

Flows into the market are also changing and this could cause a problem in the longer term. This past week AMG reported that $3 billion dollars was pulled out of equity funds. This is the second or third time in the last month we've seen outflows of this size, so it's just another indication that the flows in mutual funds are slowly shrinking. The Vanguard S&P index fund has built tremendous capital gains for their shareholders over the last 5 years and it appears to now be "selling" some of its stocks. Fund redemptions require investors to take enormous capital gains, which means enormous capital gains for their shareholders when reported at year-end. How do you think recent purchasers will react to those enormous capital gains from the long-term held positions? Paying taxes on others capital appreciation could cause disenchantment and further selling in the next few months.

Technically

The S&P 500 tested its 50-day moving average last week but managed to finish the week back above the 1280 level as it continued its grinding sideways action. With the markets big selloff on Tuesday, the daily advance decline line closed at a new 52-week low. The line closed at 47,238 and the high on the line was 85,126. The fall in the advance decline line presents a problem for the market. Since the market has been led higher by a narrow group of stocks, those stocks will be heavily sold on sell off’s.

Volume Momentum for the NYSE has now turned down after flattening out in the three previous sessions. The key day for momentum was four trading days ago giving warning (early warning days) of a change in trend.

At the same time, most indicators are almost in oversold territory except the 10 day Arms index which could mean that we may continue to see sideways action. For the medium term you can see that Bulls are starting to move up again meaning trouble may be hovering for a sharper correction in the future.

Mclellan Oscillator: -5 -100 oversold +100 overbought
Summation Index: -497

Five day arms: 1.00 and below, overbought 1.00 and above, oversold
Ten day arms: .88 .80 and below, overbought 1.00 and above, oversold

Bulls: 55.9 previous week 52.6 50% plus overbought/bearish
Bears: 29.7 previous week 29.8 50% plus oversold /bullish
Correction: 14.4 previous week 17.6`

Five day Qvix: 27.07

Economic Effects

Wednesday

Orders for U.S. durable goods suffered their biggest drop in more than seven years in February, led by weak airplane demand, casting doubt on recent hints of a recovery in the battered manufacturing sector.

Orders for sturdy items like planes, cars and machinery fell 5.0% to $191.83 billion. That followed a 3.3% rise in January that was previously reported as a 3.6% increase.

Bond prices firmed on the belief that the factory weakness would keep inflation in check and help to slow the rest of the economy from its fast growth in recent months.

Much of the latest month's weakness stemmed from the transportation sector, especially aircraft. Orders for all types of transportation goods, including cars, were down 14.3 percent after rising 13.5% in January. Excluding the typically volatile transportation sector, durable goods orders declined 1.7% in February after a 0.1% rise in January.

February's drop in overall orders broke a three-month string of increases and marked the steepest decline since orders fell 6.5% in December 1991. U.S. economists had expected February orders to fall by 2%, but predicted an increase of 0.3% excluding the transportation sector.

Apart from transportation, the durable goods report also showed weakness in demand for electronics equipment and industrial machinery. The electronics and electrical equipment component fell 8.5% in February, while industrial machinery orders fell 0.4%. Unfilled durable goods orders, viewed as a sign of future demand, fell 0.4% in February. Shipments, which signal past demand, eased 0.1%. A private survey released earlier this month from the National Association of Purchasing Management offered a glimmer of hope for the manufacturing sector, which has been depressed by sluggishness among major U.S. trading partners. The purchasing manager’s survey showed growth in the factory sector in February after eight months of decline.

Thursday

U.S. initial jobless applications fell last week, staying below the 300,000 level for the longest period since 1973. The number of people registering first-time claims for state unemployment funds fell to 289,000 for the week ended March 20. Economists had projected new claims at 302,000 and the data, indicating a robust economy, prompted bond prices to fall slightly. Initial claims were down from a revised 299,000 the week before, originally reported at 298,000. This eighth straight week of claims under 300,000 is the longest run of claims under this level since July 22, 1972, through December 15, 1973. A level below 300,000 might be more significant now than in the 1970s because the U.S. workforce is larger today. The four-week moving average of new jobless claims, which irons out weekly claims fluctuations to give a better indication of jobless trends, fell to 292,000 from a revised 293,000 in the prior week.

Existing homes sales hit an annual rate of 5.02 million in February, a slight dip from January's record 5.04 million but still only the third time the rate has topped the five million mark, the National Association of Realtors (NAR) said. The private industry group revised January's rate downward from the 5.07 million it reported a month ago.

People with good jobs have the confidence to buy homes and new homeowners spend lots of money to fill their houses, boosting economic growth and creating more jobs. Home sales help explain why the unemployment rate is so low and the unemployment rate helps explain why home sales are so high. ``Nothing makes consumers more confident than (when) it's easy to get a job,'' Smith told a news conference. Freddie Mac reported that interest rates on 30-year mortgages fell to 6.98% this week, the first time they have dipped below 7.00% in a month.

The median price for an existing home, the level at which half of homes sold above and half below, was $129,300 in February, down from $131,300 in January, but up from $124,500 in February 1998. Regionally, the South led the way in sales, jumping 4.1% in February to an annualized rate of 2.05 million units. Sales in the Northeast rose 2.8% to a 730,000 unit rate while sales in the West dipped 0.9% to a rate of 1.07 million units.

Next Week’s Economic Statistics

On Monday we get Consumer Confidence and the Federal Reserve is meeting. The meeting will take precedence over the confidence number but with attacks going on in Kosovo and the way indicators have been mixed of late most analysts don’t think there will be a policy change. Tuesday there is the final reading on 4th quarter Gross Domestic Product number out and Factory Orders. Factory orders will probably be the only number that could move the market but even that isn’t likely unless it is an extremely weak number. This could cause a sell off in stocks, as traders are already edgy about earnings coming in lower this coming quarter. On Thursday we get Jobless Claims, Personal Income, National Association of Purchasing Managers report, Construction Spending and FOMC from the meeting in February. All of these indicators are important and could move the market but the most important number will be the personal income number. There has been an increase in wages and this number will be a pre-cursor to the unemployment report on Friday. We get the Unemployment number on Friday and this report always moves the market. Unemployment is already low and wages are rising so if we see another strong number we should expect weakness in stocks and bonds.

MARKET CLOSES

Index

Last Week

This Week

Change

Percent

Dow Jones

9903.55

9822.24

S & P 500

1299.28

1282.81

S & P 500 Futures Dec.

1310.00

1297.00

S & P 100

650.11

643.69

Nasdaq

2421.32

2419.33

Russell 2000

396.77

393.92

30 Year bond

5.54%

5.59%

Program Trades

This week we were able to place our put trades for the month. Premiums dropped quite a bit in puts already but have dropped even stronger in calls. Probability numbers for current trades are all above 90% except the 1220/1215 put trade, which is only 88%. With all of the mixed things that are affecting the market, we’ll probably see a lot of volatility with the market remaining mostly in a sideways pattern. Perfect for our trades!

Average Entry price

 

Bid

Ask

last

         
 

S&P 500 Cash Trades:

     

May 1200 put $24.00

Strangle Trade

18.65

19.88

19.00

May 1400 call for $8.75

$32.75.

7.38

8.38

8.50

         

1200 sold SPX Put for $11.38

Ultra Trade

4.65

5.32

5.25

1175 bought SPX Put for $8.88

$2.50 credit spread.

3.13

3.88

4.00

         
 

S&P 100 CashTrades:

     
         

610 sold OEX Put $5.50

Long trade

3.88

4.00

4.13

605 bought OEX Put $4.38

$.88 credit spread

3.25

3.32

3.32

         

600 sold OEX Put $4.25

Ultra trade

2.75

2.44

2.50

595 bought OEX Put $3.75

$.50 credit spread

2.32

2.44

2.50

         
 

S&P 500 Options Feb. Futures Trades

High

Low

Close

         

Sold 1200 put average $9.75

Ultra Trade

6.00

4.50

5.00

Bought 1195 put average $9.10

$.65 Credit

4.80

2.50

4.80

Some people also sold the 1190 put for an average price of $8.55 for an average of

$1.20 Credit

     
         

May 1200 put $22.00

Strangle Trade

20.00

18.80

18.50

May 1400 call for $9.50

$31.50.

8.30

7.80

7.80

         

Sold 1220 Put average $14.75

Long Trade

8.00

8.00

8.00

Bought 1215 average $13.75.

$1.00 Credit

N/t

N/t

6.10

         

Copyright 1998. All rights reserved. The information contained in the AGORA OUTLOOK NEWSLETTER is based upon data that is believed to be accurate, but is not guaranteed, and subject to change without notice. All projections, forecasts, opinions, and track records cannot be guaranteed to equal our past performance. Persons reading this newsletter are responsible for their actions. Officers and employees of this publication may at times have a position in the securities mentioned, or related services.

Short Trades

Long Trades

Ultra Trades

Outright Short Sales

1999 Current

67%

1999 Current

24%

1999 Current

54%

1999 Current

22%

1998

66%

1998

43%

1998

79%

1998

71%

1997

108%

1997

188%

1997

82%

   
1996

163%

1996

169%

1996

99%

   
    1995

93%

1995

76%

   
    1994

79%

1994

89%

   
    1993

177%

1993

long

   
    1992

112%

1992

long

   
    1991

162%

1991

long

   
    1990

166%

1990

long

   

Futures Trades

Outright Sells & Strangles

Long Trades

Ultra Trades

1999 Current 66% 1999 Current 5% 1999 Current 63%
1998 130% 1998 93% 1998 16%

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