W E D N E S D A Y   E V E N I N G   E X T R E M E   M A R K E T S
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Wednesday: The CRB Index has eased 0.66 points to 189.67. The 
US Dollar Index gained 0.26 points to 115.48.

The Dow Industrials advanced 71.34 points, at 10070.49, while 
the S&P 500 climbed 6.66 points, last seen at 1149.56. The 
Nasdaq Composite declined 21.87 points to 1982.89.
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E X T R E M E   M A R K E T   C O M M E N T A R Y
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The STOCK INDEXES http://quotes.ino.com/exchanges/?c=indexes

Stock indexes were mixed on Wednesday. The NASDAQ closed lower on
Wednesday on ideas that some of the tech stocks have become
overvalues, which triggered a round of profit taking by investors.
Additional pressure came from news that Motorola will trim its job
force by another 9,400 jobs. Closes above last week?s high at 2036.54
would temper the bearish outlook for the NASDAQ and could lead to
sideways to higher prices into the end of the year. Closes below
1898.80 would open the door for a larger-degree decline into early-
January. The March S&P 500 index closed higher for the fourth day in
a row on Wednesday as it continues to rebounded off the 25%
retracement level of this fall?s rally crossing at 1120.66. However,
it will take closes above December's high at 1176 to renew this
fall's rally. Until then, I would not be surprised to see March trade
sideways into the end of the year. 

The Dow closed higher for the third day in a row on Wednesday.
Support came from better-than-expected leading economic indicators
for November. The Dow has fought back from last week's low and is
poised to test broken trendline support and the 62% retracement level
of the May/September decline crossing at 10,094.10. Closes above
these two resistance levels are needed to renew this fall's rally. 

INTEREST RATES http://quotes.ino.com/exchanges/?c=interest

March T-bonds extended their rebound off Monday's on Wednesday and is
challenging trendline resistance drawn across the Nov./Dec. highs,
which crosses near 101-16. Support came from better-than-expected
leading economic indicators for November. Multiple closes above the
aforementioned downtrend line are needed to confirm a bottom and
trend change. Momentum indicators are diverging and have turned
bullish signaling that sideways to higher prices are possible into
the end of the year. However, I would not be surprised to see a pause
if not minor setback on Thursday as March may try to consolidate some
of this week's short covering gains ahead of the Christmas Holiday. 

The CRB INDEX http://quotes.ino.com/exchanges/?c=indexes

The CRB index closed lower for the third day in a row on Wednesday
due to weakness in meats, precious metals, fiber and natural gas.
Today's low fell short of retesting this fall's uptrend line. Closes
above 193.39 or below 187.73 are needed to clear up near-term
direction in the market. Stochastics and the RSI are bullish
signaling that sideways to higher prices are still possible into the
end of the year.

ENERGY MARKETS http://quotes.ino.com/exchanges/?c=energy

The energy markets closed higher on Wednesday following Tuesday's API
inventory reports, which were supportive to the markets. The reports
showed that crude oil stocks rose by 929,000 barrels last week.
Distillate stocks including heating oil declined by 1.011 million
barrels and gasoline stocks fell by 873,000 barrels last week.
Additional support came from expectations for a cold snap in U.S.
weather to begin shortly after the first of the new year.

February crude oil extended this week's breakout above the fall?s
downtrend while opening the door for a test of the early-December
high crossing at 21.05 later this winter. Closes above this
resistance level could lead to a test of the 38% retracement level of
this fall's decline, which crosses at 21.77. Momentum indicators are
bullish signaling that sideways to higher prices are possible.

February heating oil closed higher on Wednesday but fell just short
of testing the early-December high crossing at 57.85. Momentum
indicators are bullish signaling that sideways to higher prices are
possible near-term. Closes above this resistance level would open the
door for a larger-degree rebound into early-January. Today's rally
was supported by the latest API inventor report that showed a 1.011
million-barrel decline in U.S. stocks last week. With forecasts
calling for colder weather for the East Coast by early-January,
additional short-covering gains are possible into the end of the
year.

February unleaded gas spiked above the early-December high of 57.62
on Wednesday following Tuesday's friendly API inventory report.
Profit taking ahead of the close tempered some of today's gains
leaving the door open for sideways trading on Thursday. However,
momentum indicators are bullish signaling that additional strength is
possible into the end of the year. Closes above 57.62 would set the
stage for a test of November's gap crossing at 59.80 in the near
future. 

February Henry Hub natural gas closed lower on Wednesday ahead of the
release of this week's AGA inventory report. Low consumer demand due
to above normal temps across the high demand regions of the U.S.
along with lower industrial demand continues to weigh on prices.
Closes above the Oct./Nov. downtrend line or below December's low at
2.58 are needed to clear up near-term direction in the market. Short-
term momentum indicators are turning neutral to bearish hinting that
sideways to lower prices are possible into the end of the year. 

CURRENCIES http://quotes.ino.com/exchanges/?c=currencies

The March Dollar gapped up and closed higher on Wednesday as it
extends this week's short covering rebound. Closes above gap
resistance crossing at 116.55 are needed to temper the near-term
bearish outlook in the market. Stochastics and the RSI are oversold
and turning bullish signaling that a low was likely posted with
Monday's spike below the 50% retracement level of the Sept./Nov.
rally crossing at 115.42. 

The March Swiss Franc closed lower on Wednesday. Early weakness
spiked below minor trendline support drawn across last week's low. A
short covering bounce ahead of the close tempered some of today's
loss allowing March to close at minor trendline support crossing at
.6105. Additional weakness is needed to turn short-term momentum
indicators bearish. Closes above .6182 would open the door for a
larger-degree rebound into January.

The March Canadian Dollar closed lower on Wednesday thereby
confirming Tuesday's breakout below the Nov./Dec. uptrend line.
Session lows spiked below the 38% retracement level of November's
rally crossing at .6342. I would not be surprised to see a short
covering bounce on Thursday as March might try to consolidate some of
this week's losses. At the same time, momentum indicators have turned
bearish signaling that sideways to lower prices are possible into
early-January. 

The March Japanese Yen closed lower on Wednesday as it continues to
drift lower following the recent breakout below weekly support
crossing at .7903. If the decline continues, monthly fib support
crossing at .7568 is the next target later this winter. The daily ADX
signals that additional weakness is possible. It would take closes
above November?s downtrend line crossing near .7990 to confirm a
bottom and trend change has taken place.

PRECIOUS METALS http://quotes.ino.com/exchanges/?c=metals

February gold closed sharply lower on Wednesday due to profit taking,
which was triggered by a firmer U.S. Dollar. Today's close below the
early-December high crossing at 278.70 strongly suggests that the
initial short covering rebound off last week's low has likely come to
an end. Stochastics and the RSI are turning neutral to bearish with
today's loss warning traders that additional weakness into the end of
December is possible. 

March silver posted a huge key reversal down on Wednesday after early
strength led to a spike above the 50% retracement level crossing at
4.423. Today's sharp decline and low-range close sets the stage for
additional long- liquidation on Thursday. March closed below initial
trendline support crossing near 4.34 thereby increasing the odds that
a short-term top has been posted. Stochastics and the RSI have also
turned bearish from overbought levels signaling that additional
long-liquidation appears likely into the end of the year. 

March copper closed higher on Wednesday due to light short covering
ahead of the close. March continues to consolidate above December's
broken downtrend line as it is trying to solidify a bottom.
Short-term momentum indicators are turning bullish signaling that
additional short covering gains are possible into the end of the
year. 

GRAINS http://quotes.ino.com/exchanges/?c=grains

March corn closed fractionally higher on Wednesday due to spillover
support from sharply higher wheat prices. However, the corn market
remains paralyzed by the uncertainty of which supply/demand scenario
will play out in 2002. With export demand still running below the
pace needed to reach this year's USDA projection, bulls are having a
tough go of trying to build a case for higher prices anytime soon.
Traders are not expecting any major surprises in Thursday's
supply/demand report, as light pre-holiday trading volume will likely
leave March corn range bound between 2.23 and 2.10 1/4 into January.

March wheat closed sharply higher on Wednesday as news that China
purchased 200,000 metric tonnes of U.S. wheat triggered fund buying
that pushed it above minor resistance crossing at 2.90 1/2. While
light profit taking ahead of the close tempered some of today's
gains, March is poised to test this fall's downtrend line crossing
near 2.95 later this month. Closes above this resistance level would
open the door for a likely test of October's high crossing at 3.03
later this winter. Momentum indicators remain bullish signaling that
sideways to higher prices are possible into the end of the year. 

SOYBEAN COMPLEX http://quotes.ino.com/exchanges/?c=grains

January soybeans closed higher on Wednesday leaving Tuesday's key
reversal down unconfirmed. Talk that China bought about 15,000 tonnes
of U.S. soybean oil triggered today's short covering rebound. Traders
will pay close attention to Thursday's export sales report, which
needs to remain strong in order to keep the bean market from falling
any lower this winter. Closes above the Nov./Dec. downtrend line
crossing near 4.41 3/4 are needed before a short-term bottom can be
confirmed. Until then, the door remains open for a possible test of
this fall's low crossing at 4.26 1/2. Short-term momentum indicators
are bearish but becoming oversold hinting that a low might be near.

January soybean meal posted an inside day with a higher close due to
spillover support from bean oil, beans and wheat. Today's rally left
Tuesday's key reversal down unconfirmed. If the fall decline resumes,
the late-May low crossing at 146 is a possible target later this
month. Closes above 152 would temper the near-term bearish outlook in
the market. 

LIVESTOCK http://quotes.ino.com/exchanges/?c=livestock

February hogs closed lower on Wednesday as futures prices, which is
premium to the cash market, are trying to realign themselves.
Additional pressure came from light position squaring ahead of the
release of the USDA's monthly cold storage report on Thursday.
Trading is likely to move into a holding pattern ahead of the
quarterly hogs and pigs' report due to be released on December 28th.
Cash bids are called steady for Thursday, which should support a
steady to firmer opening tomorrow. Momentum indicators are neutral to
bullish hinting that sideways to higher prices are possible near-
term. 

February cattle posted an inside day with a lower close due to light
profit taking as traders began to position themselves ahead of
Friday's cattle-on-feed report. This month's decline ahead of the
report suggests that the market has already discounted any bearish
news into prices. Expectations for a possible lull in marketings in
early- January as cattle were pulled forward due to mild weather
conditions this fall should help support February cattle into
early-January barring a bearish report on Friday. Closes above
Tuesday's high at 69.57 would open the door for a larger-degree
rebound this winter. 

FOOD & FIBER http://quotes.ino.com/exchanges/?c=food

March coffee closed higher on Wednesday due to light short covering
as it consolidated some of this week's loss. Early strength filled
Monday's gap at 47.40. However, a late sell off ahead of the close
tempered some of today's gains. While exchange stocks continue to
shrink, Brazil's massive crop now growing continues to trigger
producer selling on rallies. Short-term momentum indicators have
turned bearish signaling that sideways to lower prices are possible
into the end of the year. Closes below this month's low crossing at
44.75 would renew this year?s decline while setting the stage for a
possible test of psychological support crossing at 40-cents later
this winter.

March cocoa gapped down and closed lower on Wednesday due to producer
hedging and light speculator selling. The upper range close leaves
the door open for a possible short covering bounce on Thursday. From
a broader perspective, March needs to close above November?s high at
1365 or below last week's low at 1212 to clear up near-term direction
in the market. The ability to hold at current levels in the height of
its supply period with the African main harvest advancing underscores
the firm tone underneath the market. 

March sugar closed lower on Wednesday and below the 50% retracement
level of this fall's rally crossing at 698. Today's sell off was
triggered by long-liquidation by funds. However, I would not be
surprised to see a short covering bounce on Thursday as March might
try to consolidate some of its recent losses. Longer-term, I am
looking for March to try and test November's low at 661. Momentum
indicators are bearish signaling that additional weakness near-term
is possible. 

March cotton gapped down and closed lower on Wednesday. However, a
short covering rally ahead of the close tempered much of today's loss
leaving the door open for additional short covering on Thursday if
this week's export sales report is bullish. Closes above the
Nov./Dec. downtrend line crossing near 37.45 are needed to confirm a
bottom has been posted. 

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I N O   N E W S   
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NYBOT Announces Two New Records For Russell 1000 Index
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E X T R E M E   F U T U R E S
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Updated every 10 minutes around the clock.
More at http://quotes.ino.com/analysis/extremes/futures/

WINNERS

HOF2   Heating Oil Jan 2002                       0.5613    0.0161  +2.94
WH2    Wheat Mar 2002                                293     7 1/4  +2.54
XWH2   Wheat Mar 2002                                293     6 3/4  +2.36
PNH2   Propane Mar 2002                           0.3275    0.0075  +2.34
KWZ1   Wheat Dec 2001                            280 1/2         6  +2.19
DAF2   BFP Milk Jan 2002                           11.85      0.25  +2.16
HUK2   New York Harbor Unleaded Gasoline May 20    0.6430    0.0129  +2.03
CLN2   Light Sweet Crude Oil Jul 2002              20.43      0.38  +1.88
KCU2   Coffee 'C' Sep 2002                         52.20      0.90  +1.75
BOH2   Soybean Oil Mar 2002                        15.94      0.25  +1.59

LOSERS

XCZ3   Corn Dec 2003                                 252       -14  -5.58
LBH2   Random Length Lumber Mar 2002              251.80     -8.20  -3.16
ON2    Oats Jul 2002                                 157        -5  -3.09
NGG2   Henry Hub Natural Gas Feb 2002              2.650    -0.072  -2.65
SIH2   Silver Mar 2002                             4.308    -0.110  -2.49
XOH2   Oats Mar 2002                             186 1/4    -4 1/2  -2.35
HGM2   Copper Jun 2002                            0.6875   -0.0145  -2.08
PBQ2   Frozen Pork Bellies Aug 2002               76.400    -1.550  -2.00
AFH2   Aluminum Mar 2002                          0.6455   -0.0130  -1.99
NDM2   NASDAQ 100 Index Jun 2002                 1640.00    -32.00  -1.91

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E X T R E M E   S T O C K S
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Updated every 10 minutes around the clock.
More at http://quotes.ino.com/analysis/extremes/stocks/

WINNERS

PRES   PRESERVER GROUP INC                        7.6500    2.5000  +48.08
TIVO   TIVO INC                                   5.6800    1.1000  +24.39
QMDC   QUADRAMED CORP                             9.2500    1.8000  +24.23
VIRL   VIRAGE LOGIC                              18.4100    3.3900  +22.68
CNTE   CENTENE CORP                              20.7100    3.7400  +21.67
XPRSA  U.S. XPRESS ENTERPRISES'A'                 8.1129    1.2475  +17.44
AWRE   AWARE INC                                  7.9350    1.1210  +16.54
SYNP   SYNPLICITY INC                            12.0100    1.6900  +16.54
MIR-A  MIRANT TSRT I 6.25% CONV PFD A              39.95      5.40  +15.72
MIR    MIRANT CORP                                 16.07      2.17  +15.61

LOSERS

RGA-A  REINSURANCE GRP OF AMER PFD A               49.35  -4900.65  -99.00
MM     MUTUAL RISK MANAGEMENT                       5.50     -3.34  -36.34
ENE-J  ENRON CORP $10.50 CV 2ND PFD                10.05     -3.87  -27.80
ATRX   ATRIX LABORATORIES                        20.4700   -3.8500  -15.68
SNDK   SANDISK CORP                              14.1700   -2.5500  -15.25
TESTB  TEST SECURITY                            281.6300  -50.4400  -15.19
TQNT   TRIQUINT SEMICONDUCTOR                    12.0000   -2.1200  -15.04
ANAD   ANADIGICS INC                             13.9800   -2.3700  -14.86
RESC   ROANOKE ELECTRIC STEEL                    12.9000   -1.9700  -13.59
TERN   TERAYON COMMUNICATIONS SYS                10.3400   -1.5890  -13.25
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T H A N K   Y O U
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