I would like to express my support and wishes for a safe return home to our military personnel fighting overseas to protect our freedom and to bring freedom to a severely oppressed country. I continue to believe that all human beings shares the same basic beliefs and desires, and as a result the population of Iraq and the rest of the Arab world wants to live in a free society. Critics who claim that democracy wont work in the Arab world are ignoring what is occurring in Morocco and Qatar, as those countries move towards stable democracies. Lebanon once had a stable democracy until the Soviet Union destabilized it. I believe that with the proper structure, and support, democracy will be born in Iraq. I also believe that given time, the success of the democracy in Iraq will lead to democratic reform throughout the rest of the world.

Those who are demonstrating against the war in Iraq are ignoring the suffering of the Iraqi citizens, and in effect saying that it should be allowed to continue. Saddam Hussein is tyrant who has committed unimaginable atrocities against humanity. It is well documented that one of his favorite methods of torture is to place people in a room with multiple showerheads and randomly spray them with acid until they either confess or die. Those who claim to oppose the war and be taking the "moral high ground" in the process are either incredibly wrapped up in self interest, or too cowardly to face the realities of the world.

It is already being reported that we may have captured a chemical weapons facility. If this is correct, it will significantly discredit the UN Weapons Inspection Program, and those who called for more time and sanctions. I strongly suspect that for a very long time we will see further evidence of shocking crimes committed by the regime of Saddam Hussein that may even change the course of the world politics. If these changes are managed properly they will lead to increased world trade and safety that may create another great bull market.

OK, enough of my thoughts on the war and back to our recent market activities. In February we sold the February GE 25 Puts at $1.80/contract. The Put options expired in the money, and as a result shares of GE were put to us at $25.00/share, adjusting for the $1.80 we sold the GE Puts for our cost basis in GE was $23.20/share. In the February 25th edition of the Sterling Weekly I discussed the possible scenarios involving exiting the GE position at a profit given the movement of the market. In the March 11th edition of the Sterling Weekly, based upon my concerns over the market moving lower and desire to preserve capital, I advised selling the March $22.50 Calls. We were able to sell the March $22.50 Calls for $1.30/contract. This reduced our cost basis in GE to $21.90/share. The March $22.50 Calls expired in the money on Saturday March 22nd. As a result our GE shares will be called away from us today at $22.50/share. This will result in a profit of $0.60/share in approximately 60 days. This translates into a profit of 2.6% in approximately 60 days, for an approximate annual rate of 16%. On a hypothetical position of 1,000 shares (and a capital commitment of $23,200) this is a profit of $600 in 60 days, and an annualized is a profit of $3,600.

The Dow Jones Industrial Average closed Friday at 8,521.97, up 235.37 points. Last week the Dow Jones Industrial Average completed one of its best weeks in almost 20 years. The gains were incredibly impressive with the Dow rising 662.85 points on the week, and 997.91 points from it's short term closing low of 7,524.06 set on March 11th. In percentage terms, the Dow rose 8.43% on the week, and has risen 13.26% since March 11th.

I must confess the recent rally in the Dow caught me by surprise. I received a "Buy Signal" with the Dow's close of 7,821.75 on March 13th, but I second guessed my indicators. I remembered the lack luster market prior to the start of the first Persian Gulf War, and the rally that occurred the day the war started. I was expecting a similar rally once the current war started, evidently so was a large portion of "the street".

Today's Opinion: Closed @ 8,521.97 Current Expectations: The Dow should move higher and test 8,771.01 A note of caution, this index is very over extended and in the last 6 trading days crossed above its 30, 50 and 200 day moving averages.

The S&P 500 closed Friday at 895.90 up 20.06 points. Please see my discussion of the Dow Jones Industrial Average for my opinion on the overall market. It will explain what caused me to miss the current rally. The consequences of missing that rally are another story. Because I missed the start of the current rally, I am left with the very difficult task of trying to enter the current rally before a pullback occurs. This is a lot easier said than done. The current move of the S&P indicates it is very over extended and it may be close to the downward trend line that is somewhere between 925 and 915. If you enter the market here and it pulls back then you risk being stopped out and taking losses, if you wait for a pullback and it doesn't occur, then you risk missing out on some very profitable trading. Since our indicators are giving either conflicting or no clear signal, I am going to sit Monday's trading on the sidelines and continue to look for something I will have more confidence in.

Today's Opinion: Closed @ 895.90 Current Exception: Higher The index should test 923.76 on a closing basis

The NASDAQ 100 Index closed Friday @ 1,093.12 up 12.88 points. The NASDAQ 100 continues to have the better looking chart of the 3 major indices I am currently tracking. The NDX may be starting to break its long downward trend that started when the market peaked in March of 2000. While it may take a couple of months to determine if the market is going to be moving in a sideways "basing' pattern or actually start a new upward trend, we should be at least recognize that the downward trend of the NASDAQ appears to be at an end.

Current Opinion: Closed @ 1,093.12 Current Expectations: The NDX should move Higher and test 1,094.87 and then 1,120.49