Level Three Communications

We took a position in Level Three Communications (LVLT) this morning at $1.25 a share. The stock was bought because:

1) It is at support
2) It was decimated earlier this year and has built a substantial base
3) The stock was up the last two days on very high volume

This trade is part of our philosophy of occasionally buying truly battered stocks and waiting for them to recover. We do this with a very small part of our capital and execute these types of trades in sectors that look promising (we have mentioned several times about the trades we have done like this in the biopharma sector).

The casino sector continues to rise strongly. LVS and MGM, left for dead for most of this year by the talking heads) were up strongly in the morning. They gave back some of their moves later in the day, but were still up 3% and 5.3% respectively.