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(March 29, 2002) FINANCIAL INSTRUMENTS: INTEREST RATES--Bonds sold off on Thursday after "glowing reports" emanated from various agencies and entities as indicated in the overview. Many traders took the opportunity to get an early start on the three day weekend so that volume was lighter than expected while volatility was higher than usual. We continue to feel that the economic picture, and its various revisions to data previously issued, is within a "house of mirrors". I am skeptical, (not unusual as a long time bear) that a recovery is at hand without the foundation of improved profit margins, not gross sales, and that the employment picture is a key factor in determining whether or not such a so called recovery can be maintained. On that basis I continue to favor the long bond and the ten year note as yields have risen and prices have fallen as investors try to bargain hunt in the stock market. Construction spending will be reported on Monday and should have an effect, one way or the other on stocks and bonds. We would add to bond and or call positions on any decline effected by that report.

John L. Caiazzo

www.acuvest.com

E-mail: futures@acuvest.com

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