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Where's 'Jack Bauer' When You Need Him?

April 26, 2006

Dear Fellow Options Trader,

"This principle is old, but true as fate, Kings may love treason, but the traitor hate." -- Thomas Dekker

I was gripped by two headlines in the early part of this week: "CIA Traitor Fired" and "New Osama bin Laden Tape Surfaces."

Now, I suspect most of you can connect the dots and see where I'm going with this, but I am astonished by how quickly some were willing to sweep aside the release of classified information about the U.S. war on terror, even as the Prince of Darkness briefly popped out from under his rock.

Whether we prefer to believe it was just coincidence or not, the timing of Monday's blasts that killed dozens and wounded upward of 150 people in the Egyptian town of Dahab could well have been triggered by the release of a fresh Osama bin Laden tape.

Osama could well be dead and buried, and only time will tell about that, but his minions' deadly work could very well still be directed by such releases. Stopping bin Laden and his suicide hit squads should be our top priority.

I'm sure we'll see defenders of Mary McCarthy -- the CIA analyst who leaked classified information to the media about a network of secret CIA prisons -- held out as some sort of hero to those who apologize for America's success and influence on the world. But for those of us who appreciate the sacrifice and service of the people fighting terror both at home and abroad, I think the moniker "traitor" labels Ms McCarthy quite accurately if she indeed released the information. In fact, I'd like to see Counter Terrorist Unit agent "Jack Bauer" of the television series "24" have a few minutes alone with Ms. McCarthy!

It's almost beyond comprehension that there are those in this country who want to close their eyes and pretend that the terrorists don't hate us, things are business as usual and 9/11 never happened. It's too much trouble for them to take their shoes off when they go through airport security. Some think we shouldn't be holding bad guys down in Guantanamo, and they don't believe we need the National Security Agency listening to cell phone conversations between terrorists.

No, I guess we don't need any of that. But in that case, get ready for a lot more Dahab-type situations if Ms. McCarthy and her ilk have their way.

CATCHING THE CHANGEWAVE -- ITT SET TO BEAT THE STREET

Lehman says it expects engineering and manufacturing conglomerate ITT Industries (ITT) to beat Wall Street estimates of 61 cents when they announce quarterly results Friday morning.

At the ITT May 55 Call (ITTEK) strike, I show open interest of 526 contracts, but more than three times that is changing hands for up to $1.10. ITT is up 16 cents to $54, while these calls are trading 90 cents on the bid and are offered at $1.10. With all but 151 of these contracts trading on the offer, I show a 91% bullish reading ahead of Friday's results.

Let's take advantage of this pre-earnings announcement excitement. I recommend telling your broker to buy the ITT May 55 Calls (ITTEK) for up to $1.15 with ITT trading at $53.85 or higher.

Tell your broker to buy ITT May 55 Calls (ITTEK) for up to $1.15 as long as ITT is trading for $53.85 or higher.

Good luck trading and remember -- pigs get fat, but hogs get slaughtered, so don't be a hog!


Jon "Dr. J." Najarian
Editor, ChangeWave Options Trader

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