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[Weekend Summary]

Dear Member:

It is hard to say exactly where the markets are headed. Has this week been the beginning of a Santa Claus rally? Are we in a bear market rally with another fall ahead of us? I suppose it could be either or both. The information is not really clear as I see it. The Nasdaq 100 had a strong gain this week though it fell back a bit today. Interestingly, it stopped the dip today right at the 100 day moving average. That average seems to be taking on added significance since the Dow Industrials with a big week up stopped just below the 100 day as did the SP-500. The SP-500 hit both a horizontal price resistance and came up to the 100 day before turning back down today. Something's gotta give next week with respect to the 100 day. It will either be a resistance that can't be overcome or it will become a new support for the S&P.

In this arena, I adjusted the Citigroup (C) spread by selling the Jan 37.50 calls to create a bear call spread against the long Jan 45 calls. This move brought in an additional 69 cents a share.

I added a bear call spread on United Technologies (UTX) selling the Dec 75 calls and buying the 80's for a credit of 90 cents. The sharp hop the next day provoked some subscriber concern, but I decided that no adjustment should yet be made in my position. The stock is now back down below 75 which is where it needs to stay at Dec expiration for me to keep the whole initial credit.

The iron condor on RUT (Russell 2000 Index) looks really good at the moment. The index needs to stay between 710 and 860 at Dec expiration for me to keep the whole $2.40 credit the market paid me when I entered the play.

Sirius Satellite Radio (SIRI) has jumped on positive news and I like what I see in that spread. The SPY spread is still fine with loads of time until Dec '08 expiration.

The spread on the Q's looks better this week than last as well. I will be looking for additional chances to adjust this one with an eye to more income.

Have a great weekend.

Bill

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