MORGAN STANLEY SPECTRUM TECHNICAL LP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002 or

[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to__________________

Commission File Number 0-26338

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

(Exact name of registrant as specified in its charter)

Delaware 13-3782231
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
c/o Managed Futures Department,
825 Third Ave., 8th Floor, New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (201) 209-8400

(Former name, former address, and former fiscal year, if changed
since last report)

Indicate by check-mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No___________

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2002

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
STATEMENTS OF FINANCIAL CONDITION

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

-

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)

-
MORGAN STANLEY SPECTRUM TECHNICAL L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)

-
MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS

June 30, 2002

(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Spectrum Technical L.P. (the "Partnership").
The financial statements and condensed notes herein should be read
in conjunction with the Partnership's December 31, 2001 Annual
Report on Form 10-K.

1. Organization
Morgan Stanley Spectrum Technical L.P. is a Delaware limited
partnership organized to engage primarily in the speculative
trading of futures contracts, options on futures contracts, and
forward contracts on physical commodities and other commodity
interests, including, but not limited to foreign currencies,
financial instruments, metals, energy and agricultural products.
The Partnership is one of the Morgan Stanley Spectrum Series of
funds, comprised of the Partnership, Morgan Stanley Spectrum
Commodity L.P., Morgan Stanley Spectrum Currency L.P., Morgan
Stanley Spectrum Global Balanced L.P., Morgan Stanley Spectrum
Select L.P., and Morgan Stanley Spectrum Strategic L.P.

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The general partner is Demeter Management Corporation ("Demeter").
The non-clearing commodity broker is Morgan Stanley DW Inc.
("Morgan Stanley DW"). The clearing commodity brokers are Morgan
Stanley & Co., Inc. ("MS & Co.") and Morgan Stanley & Co.
International Limited ("MSIL"). Demeter, Morgan Stanley DW, MS &
Co., and MSIL are wholly-owned subsidiaries of Morgan Stanley.
The trading advisors to the Partnership are Campbell & Company,
Inc., Chesapeake Capital Corporation, and John W. Henry & Company,
Inc., (collectively, the "Trading Advisors").

Effective June 20, 2002 Morgan Stanley Dean Witter & Co. changed
its name to Morgan Stanley.

2. Related Party Transactions
The Partnership's cash is on deposit with Morgan Stanley DW, MS &
Co., and MSIL in futures, forwards, and options trading accounts
to meet margin requirements as needed. Morgan Stanley DW pays
interest on these funds based on a prevailing rate on U.S.
Treasury bills. Brokerage fees are paid to Morgan Stanley DW.

3. Financial Instruments
The Partnership trades futures contracts, options on futures
contracts, and forward contracts on physical commodities and other

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

commodity interests, including, but not limited to foreign
currencies, financial instruments, metals, energy and
agricultural products. Futures and forwards represent contracts
for delayed delivery of an instrument at a specified date and
price. Risk arises from changes in the value of these contracts
and the potential inability of counterparties to perform under
the terms of the contracts. There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility.

The market value of contracts is based on closing prices quoted by
the exchange, bank or clearing firm through which the contracts
are traded.

The Partnership's contracts are accounted for on a trade-date
basis and marked to market on a daily basis. The Partnership
accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 defines a derivative as a
financial instrument or other contract that has all three of the
following characteristics:

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1) One or more underlying notional amounts or payment
provisions;
2) Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
3) Terms require or permit net settlement.

Generally derivatives include futures, forward, swaps or options
contracts and other financial instruments with similar
characteristics such as caps, floors and collars.

The net unrealized gains on open contracts, reported as a
component of "Equity in futures interests trading accounts" on the
statements of financial condition, and their longest contract
maturities were as follows:

Net Unrealized Gains
on Open Contracts Longest Maturities

Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $

Jun. 30, 2002 16,688,660 17,474,349 34,163,009 Jun. 2003 Sep. 2002
Dec. 31, 2001 828,853 10,676,762 11,505,615 Dec. 2002 Mar. 2002

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Partnership has credit risk associated with counterparty non-
performance. The credit risk associated with the instruments in
which the Partnership is involved is limited to the amounts
reflected in the Partnership's statements of financial condition.

The Partnership also has credit risk because Morgan Stanley DW,
MS & Co., and MSIL act as the futures commission merchants or the
counterparties, with respect to most of the Partnership's assets.
Exchange-traded futures and futures-styled options contracts are
marked to market on a daily basis, with variations in value
settled on a daily basis. Each of Morgan Stanley DW, MS & Co.,
and MSIL, as a futures commission merchant for the Partnership's
exchange-traded futures and futures-styled options contracts, are
required, pursuant to regulations of the Commodity Futures
Trading Commission ("CFTC"), to segregate from their own assets,
and for the sole benefit of their commodity customers, all funds
held by them with respect to exchange-traded futures and futures-
styled options contracts, including an amount equal to the net
unrealized gains on all open futures and futures-styled options
contracts, which funds, in the aggregate, totaled $266,301,803

MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

and $247,001,207 at June 30, 2002 and December 31, 2001,
respectively. With respect to the Partnership's off-exchange-
traded forward currency contracts, there are no daily settlements
of variations in value nor is there any requirement that an
amount equal to the net unrealized gains on open forward
contracts be segregated. With respect to those off-exchange-
traded forward currency contracts, the Partnership is at risk to
the ability of MS & Co., the sole counterparty on all of such
contracts, to perform. The Partnership has a netting agreement
with MS & Co. This agreement, which seeks to reduce both the
Partnership's and MS & Co.'s exposure on off-exchange-traded
forward currency contracts, should materially decrease the
Partnership's credit risk in the event of MS & Co.'s bankruptcy
or insolvency.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity - The Partnership deposits its assets with Morgan
Stanley DW as non-clearing broker, and MS & Co., and MSIL as
clearing brokers in separate futures, forwards, and options
trading accounts established for each Trading Advisor, which
assets are used as margin to engage in trading. The assets are
held in either non-interest bearing bank accounts or in securities
and instruments permitted by the CFTC for investment of customer
segregated or secured funds. The Partnership's assets held by the
commodity brokers may be used as margin solely for the
Partnership's trading. Since the Partnership's sole purpose is to
trade in futures, forwards, and options, it is expected that the
Partnership will continue to own such liquid assets for margin
purposes.

The Partnership's investment in futures, forwards, and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily
limits". Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,

positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or
within the limit. Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
trading. These market conditions could prevent the Partnership
from promptly liquidating its futures or options contracts and
result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currency. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.

There are no material trends, events or uncertainties known at the
present time that will result in or that are reasonably likely to
result in the Partnership's liquidity increasing or decreasing in
any material way.

The Partnership has never had illiquidity affect a material
portion of its assets.

The Partnership has no off-balance sheet arrangements, nor
contractual obligations or commercial commitments to make future
payments that would affect the Partnership's liquidity or capital
resources. The contracts traded by the Partnership are accounted
for on a trade-date basis and marked to market on a daily basis.
The value of foreign currency forward contracts is based on the
spot rate as of the close of business, New York City time, on a
given day.

Capital Resources. The Partnership does not have, nor expect to
have, any capital assets. Redemptions, exchanges, and sales of
additional units of limited partnership interest ("Unit(s)") in
the future will affect the amount of funds available for
investment in futures, forwards, and options in subsequent
periods. It is not possible to estimate the amount and therefore,
the impact of future redemptions of Units.

There are no known material trends, favorable or unfavorable, nor
any expected material changes to the Partnership's capital
resource arrangements at the present time.

Results of Operations
General. The Partnership's results depend on the Trading Advisors
and the ability of each Trading Advisor's trading programs to take

advantage of price movements or other profit opportunities in the
futures, forwards, and options markets. The following presents a
summary of the Partnership's operations for the three and six
month periods ended June 30, 2002 and 2001, and a general
discussion of its trading activities during each period. It is
important to note, however, that the Trading Advisors trade in
various markets at different times and that prior activity in a
particular market does not mean that such market will be actively
traded by the Trading Advisors or will be profitable in the
future. Consequently, the results of operations of the Partnership
are difficult to discuss other than in the context of the Trading
Advisors' trading activities on behalf of the Partnership and how
the Partnership has performed in the past.

The Partnership's results of operations are set forth in financial
statements prepared in accordance with United States generally
accepted accounting principles, which require the use of certain
accounting policies that affect the amounts reported in these
financial statements, including the following. The contracts the
Partnership trades are accounted for on a trade-date basis and
marked to market on a daily basis. The difference between their
cost and market value is recorded on the Statements of Operations
as "Net change in unrealized profit/loss" for open (unrealized)
contracts, and recorded as "Realized profit/loss" when open
positions are closed out, and the sum of these amounts constitutes

the Partnership's trading revenues. Earned interest income
revenue, as well as management fees, incentive fees and brokerage
fees expenses of the Partnership are recorded on an accrual
basis. Demeter believes that, based on the nature of the
operations of the Partnership, no assumptions other than those
presently used relating to the application of critical accounting
policies are reasonably plausible that could affect reported
amounts.

For the Quarter and Six Months Ended June 30, 2002
For the quarter ended June 30, 2002, the Partnership recorded
total trading revenues, including interest income, of $48,100,199
and posted an increase in net asset value per Unit. The most
significant gains of approximately 20.6% were recorded in the
currency markets primarily during May and June from previously
established long positions in the euro, Swiss franc and Japanese
yen relative to the U.S. dollar as the value of these currencies
strengthened against the dollar amid falling equity prices,
concerns regarding corporate accounting integrity, and weak
economic data. Additional gains of approximately 1.3% were
recorded in the global stock index futures markets from short
positions in European stock index futures as prices trended lower
on geopolitical concerns and uncertainty surrounding a global

economic recovery. A portion of the Partnership's overall gains
for the quarter was offset by losses of approximately 2.2% in the
energy markets primarily from previously established long futures
positions in crude oil and its related products as prices moved
lower during May on supply and demand concerns. Smaller losses
of approximately 1.0% were recorded in the metals markets
primarily during April, as copper prices reversed lower early in
the month amid increasing tensions in the Middle East, growing
inventory levels and weakening demand, resulting in losses from
previously established long futures positions. Total expenses
for the three months ended June 30, 2002 were $5,927,970,
resulting in net income of $42,172,229. The net asset value of a
Unit increased from $13.74 at March 31, 2002 to $16.16 at June
30, 2002.

For the six months ended June 30, 2002, the Partnership recorded
total trading revenues, including interest income, of $33,801,538
and posted an increase in net asset value per Unit. The most
significant gains of approximately 15.0% were recorded in the
currency markets primarily during May and June from previously
established long positions in the euro, Swiss franc and Japanese
yen relative to the U.S. dollar as the value of these currencies
strengthened against the U.S. dollar amid falling equity prices,
concerns regarding corporate accounting integrity and weak

economic data. Additional gains of approximately 0.5% were
recorded in the energy markets primarily during March, as crude
oil prices continued their upward trend amid escalating tensions
in the Middle East, supply concerns and signs of a rebound in the
economic demand for oil, thus resulting in profits from
previously established long futures positions. A portion of the
Partnership's overall gains for the quarter was offset by losses
of approximately 0.9% in the metals markets primarily from short
positions in aluminum futures as prices increased during April on
signs of recovery in U.S. industrial production. Elsewhere in the
metals markets, copper prices reversed lower early in April amid
increasing tensions in the Middle East, growing inventory levels
and weakening demand, resulting in losses from previously
established long futures positions. Additional losses of
approximately 0.8% were recorded in the global stock index
futures markets primarily from long positions in Nikkei Index
futures as Japanese equity prices reversed lower early in June.
Total expenses for the six months ended June 30, 2002 were
$12,279,339 resulting in net income of $21,522,199. The net
asset value of a Unit increased from $14.93 at December 31, 2001
to $16.16 at June 30, 2002.

For the Quarter and Six Months Ended June 30, 2001
For the quarter ended June 30, 2001, the Partnership recorded
total trading losses, net of interest income, of $37,165,746 and
posted a decrease in net asset value per Unit. The most
significant losses of approximately 5.6% were experienced
primarily during April in the global interest rate futures
markets as a portion of previously recorded profits was given
back from long positions in U.S. and European interest rate
futures as prices reversed sharply downward, after trending
higher earlier this year, as investors deserted fixed income
securities in an asset shift to equities. Losses were also
recorded from short positions in U.S. interest rate futures as
prices moved higher in a flurry of flight-to-quality buying
spawned by Middle East instability on June 22nd and in
anticipation of the Federal Reserve interest rate cut in late
June. Additional losses were recorded during the third week of
June from short positions in German interest rate futures as
prices increased following a drop in German business confidence
data and signs that inflation may have peaked in that region,
which reinforced the prospects of European interest rate cuts. In
the currency markets, losses of approximately 3.2% were recorded
primarily during April and May from short positions in the
Japanese yen as the value of the yen reversed higher versus the
U.S. dollar following a surprise interest rate cut by the U.S.

Federal Reserve and on optimism that the Japanese government
would unveil an emergency package to stimulate that country's
ailing economy. During early June, additional losses were
incurred from long positions in the Japanese yen as the value of
the yen weakened relative to the U.S. dollar on the Bank of
Japan's decision to keep its monetary policy unchanged. In the
global stock index futures markets, losses of approximately 2.5%
were incurred primarily during the first half of April from short
positions in DAX Index futures as prices reversed higher on
renewed hopes that the worst may be over for badly beaten
technology and telecom stock. During early June, additional
losses were recorded from long positions in DAX Index futures as
prices declined on earnings warnings and weak economic data in
the U.S. and Germany. In the energy markets, losses of
approximately 1.4% were experienced primarily during early April
from short futures positions in crude oil and heating oil as
prices reversed sharply higher on supply concerns amid refinery
production problems and expectations that inventory data will
show drawdowns. During June, additional losses were experienced
from long futures positions in crude oil and its related products
as prices declined on reports of an increase in supplies. In the
metals markets, losses of approximately 0.9% were recorded
primarily during late May from newly established long gold
futures positions as gold prices sharply reversed lower, after

spiking higher earlier in May, following the return of more
bearish sentiment regarding the outlook for the U.S. economy.
These losses were partially offset by gains of approximately 0.4%
recorded in the agricultural markets primarily during May from
short corn futures positions as corn prices dropped on forecasts
for wet, cool weather conditions in the U.S. midwest and on
reports of declining demand. Total expenses for the three months
ended June 30, 2001 were $7,015,319, resulting in a net loss of
$44,181,065. The net asset value of a Unit decreased from $18.11
at March 31, 2001 to $15.46 at June 30, 2001.

For the six months ended June 30, 2001, the Partnership recorded
total trading revenues, including interest income, of $5,073,089
and, after expenses, posted a decrease in net asset value per
Unit. The most significant losses of approximately 6.5% were
recorded in the energy markets throughout the first six months of
the year from crude oil futures and its related products as a
result of volatility in oil prices due to a continually changing
outlook for supply, production and demand. In the agricultural
markets, losses of approximately 0.3% were experienced primarily
during January from long corn and soybean meal futures positions
as prices moved lower due to favorable South American weather.
These losses were partially offset by gains of approximately 4.4%
recorded in the global interest rate futures markets primarily

throughout the majority of the first quarter from long positions
in Japanese government bond futures as prices moved higher on
concerns regarding that country's economy. In the currency
markets, profits of approximately 3.3% were recorded throughout
the majority of the first quarter from short positions in the
Japanese yen as the value of the yen weakened relative to the
U.S. dollar on continuing concerns for the Japanese economy and
in both anticipation and reaction to the Bank of Japan's decision
to reinstate its zero interest rate policy. Total expenses for
the six months ended June 30, 2001 were $15,386,499, resulting in
a net loss of $10,313,410. The net asset value of a Unit
decreased from $16.08 at December 31, 2000 to $15.46 at June 30,
2001.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options. The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership's assets are at risk of
trading loss. Unlike an operating company, the risk of market-
sensitive instruments is central, not incidental, to the
Partnership's main business activities.

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk. Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities. Fluctuations in market risk based
upon these factors result in frequent changes in the fair value
of the Partnership's open positions, and, consequently, in its
earnings and cash flow.

The Partnership's total market risk is influenced by a wide
variety of factors, including the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,

each of these factors may act to increase or decrease the market
risk associated with the Partnership.

The Partnership's past performance is not necessarily indicative
of its future results. Any attempt to numerically quantify the
Partnership's market risk is limited by the uncertainty of its
speculative trading. The Partnership's speculative trading may
cause future losses and volatility (i.e., "risk of ruin") that
far exceed the Partnership's experience to date or any reasonable
expectations based upon historical changes in market value.

Quantifying the Partnership's Trading Value at Risk
The following quantitative disclosures regarding the Partnership's
market risk exposures contain "forward-looking statements" within
the meaning of the safe harbor from civil liability provided for
such statements by the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934). All
quantitative disclosures in this section are deemed to be forward-
looking statements for purposes of the safe harbor, except for
statements of historical fact.

The Partnership accounts for open positions on the basis of mark-
to-market accounting principles. Any loss in the market value of
the Partnership's open positions is directly reflected in the

Partnership's earnings, whether realized or unrealized, and its
cash flow. Profits and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin.

The Partnership's risk exposure in the market sectors traded by
the Trading Advisors is estimated below in terms of Value at Risk
("VaR"). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership's
trading portfolio. The Partnership estimates VaR using a model
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price and
interest rate risk. Market risks that are incorporated in the VaR
model include equity and commodity prices, interest rates, foreign
exchange rates, and correlation among these variables. The
hypothetical changes in portfolio value are based on daily
percentage changes observed in key market indices or other market
factors ("market risk factors") to which the portfolio is
sensitive. The historical observation period of the Partner-
ship's VaR is approximately four years. The one-day 99%
confidence level of the Partnership's VaR corresponds to the
negative change in portfolio value that, based on observed market
risk factors, would have been exceeded once in 100 trading days.
In other words, one-day VaR for a portfolio is a number such that

losses in this portfolio are estimated to exceed the VaR only one
day in 100.

VaR is calculated using historical simulation. Demeter uses
approximately four years of daily market data (1,000
observations) and revalues its portfolio (using delta-gamma
approximations) for each of the historical market moves that
occurred over this time period. This generates a probability
distribution of daily 'simulated profit and loss' outcomes. The
VAR is the appropriate percentile of this distribution. For
example, the 99% one-day VaR would represent the 10th worst
outcome from Demeter's simulated profit and loss series.

VaR models, including the Partnership's, are continuously
evolving as trading portfolios become more diverse and modeling
techniques and systems capabilities improve. Please note that
the VaR model is used to numerically quantify market risk for
historic reporting purposes only and is not utilized by either
Demeter or the Trading Advisors in their daily risk management
activities. Please further note that VaR as described above may
not be comparable to similarly titled measures used by other
entities.

The Partnership's Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the

Partnership's open positions as a percentage of total net assets
by primary market risk category at June 30, 2002 and 2001. At
June 30, 2002 and 2001, the Partnership's total capitalization
was approximately $282 million and $261 million, respectively.

Primary Market June 30, 2002 June 30, 2001
Risk Category Value at Risk Value at Risk

Currency (2.59)% (2.48)%
Interest Rate (2.59) (1.53)
Equity (1.08) (0.66)
Commodity (0.70) (0.62)
Aggregate Value at Risk (4.11)% (2.91)%

The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
category. The aggregate VaR, listed above for the Partnership,
represents the aggregate VaR of the Partnership's open positions
across all the market categories, and is less than the sum of the
VaRs for all such market categories due to the diversification
benefit across asset classes.

The table above represents the VaR of the Partnership's open
positions at June 30, 2002 and 2001 only and is not necessarily
representative of either the historic or future risk of an
investment in the Partnership. Because the Partnership's only

business is the speculative trading of futures, forwards, and
options, the composition of its trading portfolio can change
significantly over any given time period, or even within a single
trading day. Any changes in open positions could positively or
negatively materially impact market risk as measured by VaR.

The table below supplements the quarter-end VaR by presenting the
Partnership's high, low and average VaR, as a percentage of total
net assets for the four quarterly reporting periods from July 1,
2001 through June 30, 2002.

Primary Market Risk Category High Low Average
Currency (2.71)% (0.69)% (1.93)%

Interest Rate (2.59) (0.70) (1.83)

Equity (1.08) (0.26) (0.73)

Commodity (1.71) (0.46) (0.87)

Aggregate Value at Risk (4.11)% (2.63)% (3.23)%

Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage

causes the face value of the market sector instruments held by the
Partnership to typically be many times the total capitalization of
the Partnership. The value of the Partnership's open positions
thus creates a "risk of ruin" not typically found in other
investments. The relative size of the positions held may cause
the Partnership to incur losses greatly in excess of VaR within a
short period of time, given the effects of the leverage employed
and market volatility. The VaR tables above, as well as the past
performance of the Partnership, give no indication of such "risk
of ruin". In addition, VaR risk measures should be viewed in light
of the methodology's limitations, which include the following:
? past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
? changes in portfolio value caused by market movements may
differ from those of the VaR model;
? VaR results reflect past trading positions while future risk
depends on future positions;
? VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
? the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

The VaR tables above present the results of the Partnership's VaR
for each of the Partnership's market risk exposures and on an
aggregate basis at June 30, 2002 and 2001, and for the end of the
four quarterly reporting periods from July 1, 2001 through June
30, 2002. Since VaR is based on historical data, VaR should not
be viewed as predictive of the Partnership's future financial
performance or its ability to manage or monitor risk. There can
be no assurance that the Partnership's actual losses on a
particular day will not exceed the VaR amounts indicated above or
that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial.

At June 30, 2002, the Partnership's cash balance at Morgan Stanley
DW was approximately 75% of its total net asset value. A decline
in short-term interest rates will result in a decline in the
Partnership's cash management income. This cash flow risk is not
considered to be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments, in relation to the Partnership's net
assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures -
constitute forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. The Partnership's primary market risk
exposures as well as the strategies used and to be used by
Demeter and the Trading Advisors for managing such exposures are
subject to numerous uncertainties, contingencies and risks, any
one of which could cause the actual results of the Partnership's
risk controls to differ materially from the objectives of such
strategies. Government interventions, defaults and expro-
priations, illiquid markets, the emergence of dominant
fundamental factors, political upheavals, changes in historical
price relationships, an influx of new market participants,

increased regulation and many other factors could result in
material losses as well as in material changes to the risk
exposures and the risk management strategies of the Partnership.
Investors must be prepared to lose all or substantially all of
their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at June 30, 2002, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency. The primary market exposure at June 30, 2002 was to
the currency complex. The Partnership's currency exposure is to
exchange rate fluctuations, primarily fluctuations which disrupt
the historical pricing relationships between different currencies
and currency pairs. Interest rate changes as well as political
and general economic conditions influence these fluctuations.
The Partnership trades a large number of currencies, including
cross-rates - i.e., positions between two currencies other than
the U.S. dollar. At June 30, 2002, the Partnership's major
exposure was to outright U.S. dollar positions. Outright
positions consist of the U.S. dollar vs. other currencies. These
other currencies include major and minor currencies. Demeter
does not anticipate that the risk profile of the Partnership's

currency sector will change significantly in the future. The
currency trading VaR figure includes foreign margin amounts
converted into U.S. dollars with an incremental adjustment to
reflect the exchange rate risk inherent to the U.S.-based
Partnership in expressing VaR in a functional currency other than
U.S. dollars.

Interest Rate At June 30, 2002 the Partnership had market
exposure to the global interest rate sector. Exposure was
primarily spread across the U.S., European and Japanese interest
rate sectors. Interest rate movements directly affect the price
of the sovereign bond futures positions held by the Partnership
and indirectly affect the value of its stock index and currency
positions. Interest rate movements in one country as well as
relative interest rate movements between countries materially
impact the Partnership's profitability. The Partnership's
primary interest rate exposure is generally to interest rate
fluctuations in the U.S. and the other G-7 countries. The G-7
countries consist of France, the U.S., Britain, Germany, Japan,
Italy, and Canada. However, the Partnership also takes futures
positions in the government debt of smaller nations - e.g.,
Australia. Demeter anticipates that G-7 interest rates will
remain the primary interest rate exposure of the Partnership for
the foreseeable future. The speculative futures positions held

by the Partnership may range from short to long-term instruments.
Consequently, changes in short, medium or long-term interest
rates may have an effect on the Partnership.

Equity. At June 30, 2002 the Partnership had market exposure to
equity price risk in the G-7 countries. The stock index futures
traded by the Partnership are by law limited to futures on
broadly-based indices. At June 30, 2002, the Partnership's
primary exposures were to the NASDAQ (U.S.), DAX (Germany) and
Euro Stoxx 50 (Europe) stock indices. The Partnership is
primarily exposed to the risk of adverse price trends or static
markets in the U.S., European and Japanese indices. Static
markets would not cause major market changes but would make it
difficult for the Partnership to avoid being "whipsawed" into
numerous small losses.

Commodity.
Energy. At June 30, 2002, the Partnership's energy exposure
was shared primarily by futures contracts in crude oil and
its related products, and natural gas. Price movements in
these markets result from political developments in the
Middle East, weather patterns and other economic
fundamentals. Significant profits and losses, which have
been experienced in the past, are expected to continue to be

experienced in these markets. Natural gas has exhibited
volatility in prices resulting from weather patterns and
supply and demand factors and may continue in this choppy
pattern.

Soft Commodities and Agriculturals. At June 30, 2002, the
Partnership had exposure to the markets that comprise these
sectors. Most of the exposure was to the coffee, cotton and
sugar markets. Supply and demand inequalities, severe
weather disruption and market expectations affect price
movements in these markets.

Metals. The Partnership's metals exposure at June 30, 2002
was to fluctuations in the price of precious metals, such as
gold and silver, and base metals, such as copper, aluminum,
nickel, zinc, tin and lead. Economic forces, supply and
demand inequalities, geopolitical factors and market
expectations influence price movements in these markets.
The Trading Advisors, from time to time, take positions when
market opportunities develop. Demeter anticipates that the
Partnership will continue to be exposed to the precious and
base metals markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2002:

Foreign Currency Balances. The Partnership's primary foreign
currency balances at June 30, 2002 were in euros, Canadian
dollars, Australian dollars, Japanese yen and New Zealand
dollars. The Partnership controls the non-trading risk of
these balances by regularly converting them back into U.S.
dollars upon liquidation of their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisors, separately, attempt to
manage the risk of the Partnership's open positions in essentially
the same manner in all market categories traded. Demeter attempts
to manage market exposure by diversifying the Partnership's assets
among different Trading Advisors, each of whose strategies focus
on different market sectors and trading approaches, and monitoring
the performance of the Trading Advisors daily. In addition, the
Trading Advisors establish diversification guidelines, often set
in terms of the maximum margin to be committed to positions in any
one market sector or market-sensitive instrument.

Demeter monitors and controls the risk of the Partnership's non-
trading instrument, cash. Cash is the only Partnership investment
directed by Demeter, rather than the Trading Advisors.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS
None.

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Partnership, Morgan Stanley Spectrum Strategic L.P.
("Spectrum Strategic") and Morgan Stanley Spectrum Global
Balanced L.P. ("Spectrum Global Balanced"), collectively
registered 10,000,000 Units pursuant to a Registration Statement
on Form S-1, which became effective on September 15,1994 (SEC
File Number 33-80146). While such Units were not allocated to
the Partnership, Spectrum Strategic, and Spectrum Global Balanced
at that time, they were subsequently allocated for convenience
purposes as follows: the Partnership 4,000,000, Spectrum
Strategic 4,000,000, and Spectrum Global Balanced 2,000,000. The
Partnership, Spectrum Strategic, and Spectrum Global Balanced
collectively registered an additional 20,000,000 Units pursuant
to the new Registration Statement on Form S-1, which became
effective on January 31, 1996 (SEC File Number 333-00494); such
Units were allocated as follows: the Partnership 9,000,000,
Spectrum Strategic 6,000,000, and Spectrum Global Balanced
5,000,000. The Partnership, Spectrum Strategic, and Spectrum
Global Balanced collectively registered an additional 8,500,000

Units pursuant to another Registration Statement on Form S-1,
which became effective on April 30, 1996 (SEC File Number 333-
3222); such Units were allocated to the Partnership, Spectrum
Strategic, and Spectrum Global Balanced as follows: the
Partnership 5,000,000, Spectrum Strategic 2,500,000, and Spectrum
Global Balanced 1,000,000.

The Partnership registered an additional 5,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on May 11, 1998 (SEC File Number 333-47831).

The Partnership registered an additional 10,000,000 Units
pursuant to another Registration Statement on Form S-1, which
became effective January 21, 1999 (SEC File Number 333-68779).

The Partnership registered an additional 1,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on April 30, 2002 (SEC File Number 333-84652).

The managing underwriter for the Partnership is Morgan Stanley
DW.

Units are being sold at monthly closings at a price equal to 100%
of the net asset value of a Unit as of the last day of each
month.

Through June 30, 2002, 28,775,055.293 Units were sold, leaving
5,224.944.707 Units unsold. The aggregate price of the Units
sold through June 30, 2002 was $392,730,683.

Since no expenses are chargeable against proceeds, 100% of the
proceeds of the offering have been applied to the working capital
of the Partnership for use in accordance with the "Use of
Proceeds" section of its Prospectus and Supplement to the
Prospectus.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) Exhibits

3.01 Form of Amended and Restated Limited Partnership
Agreement of the Partnership is incorporated by reference
to Exhibit A of the Partnership's Prospectus, dated April
30, 2002, filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933 on May 8, 2002.
3.02 Certificate of Limited Partnership, dated April 18, 1994,
is incorporated by reference to Exhibit 3.02 of the
Partnership's Registration Statement on Form S-1 (File
No. 33-80146) filed with the Securities and Exchange
Commission on June 10, 1994.
3.03 Certificate of Amendment of Certificate of Limited
Partnership, dated April 6, 1999 (changing its name from
Dean Witter Spectrum Technical L.P.), is incorporated by
reference to Exhibit 3.03 of the Partnership's
Registration Statement on Form S-1 (File No. 333-68779)
filed with the Securities and Exchange Commission on
April 12, 1999.
3.04 Certificate of Amendment of Certificate of Limited
Partnership, dated November 1, 2001 (changing its name
from Morgan Stanley Dean Witter Spectrum Technical L.P.),
is incorporated by reference to Exhibit 3.01 of the
Partnership's Form 8-K (File No. 0-26338) filed with the
Securities and Exchange Commission on November 1, 2001.

10.01 Management Agreement, dated as of November 1, 1994, among
the Partnership, Demeter, and Campbell & Company, Inc. is
incorporated by reference to Exhibit 10.01 of the
Partnership's Form 10-K (File No. 0-26338) for fiscal
year ended December 31, 1998 filed on June 30, 1999.
10.01(a) Amendment to Management Agreement, dated as of November
30, 2000, among the Partnership, Demeter, and Campbell &
Company, Inc. is incorporated by reference to Exhibit
10.2 of the Partnership's Form 8-K (File No. 0-26338)
filed with the Securities and Exchange Commission on
January 3, 2001.
10.02 Management Agreement, dated as of November 1, 1994, among
the Partnership, Demeter, and Chesapeake Capital
Corporation is incorporated by reference to Exhibit 10.02
of the Partnership's Form 10-K (File No. 0-26338) for
fiscal year ended December 31, 1998 filed on March 31,
1999.
10.03 Management Agreement, dated as of November 1, 1994, among
the Partnership, Demeter, and John W. Henry & Co. is
incorporated by reference to Exhibit 10.03 of the
Partnership's Form 10-K (File No. 0-26338) for fiscal
year ended December 31, 1998 filed on June 30, 1999.
10.03(a) Amendment to Management Agreement, dated as of November
30, 2000, among the Partnership, Demeter, and John W.
Henry & Company, Inc. is incorporated by reference to
Exhibit 10.1 of the Partnership's Form 8-K (File No. 0-
26338) filed with the Securities and Exchange Commission
on January 3, 2001.
10.07 Form of Subscription and Exchange Agreement and Power of
Attorney to be executed by each purchaser of Units is
incorporated by reference to Exhibit B of the
Partnership's Prospectus dated April 30, 2002, filed with
the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1993 on May 8,
2002.
10.08 Amended and Restated Escrow Agreement, dated as of March
10, 2000, among the Partnership, Morgan Stanley Spectrum
Select L.P., Morgan Stanley Spectrum Strategic L.P.,
Morgan Stanley Spectrum Global Balanced L.P., Morgan
Stanley Spectrum Currency L.P., Morgan Stanley Spectrum
Commodity L.P., Morgan Stanley DW, and The Chase
Manhattan Bank, the escrow agent, is incorporated by
reference to Exhibit 10.08 of the Partnership's
Registration Statement on Form S-1 (File No. 333-68779)

filed with the Securities and Exchange Commission on
November 2, 2001.
10.09 Form of Subscription Agreement Update Form to be executed
by purchasers of Units is incorporated by reference to
Exhibit C of the Partnership's Prospectus dated April 30,
2002, as filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933 on May 8, 2002.
10.10 Amended and Restated Customer Agreement between the
Partnership and Morgan Stanley DW, dated as of October
16, 2000, is incorporated by reference to Exhibit 10.01
of the Partnership's Form 8-K (File 0-26338) filed with
the Securities and Exchange Commission on November 1,
2001.
10.11 Commodity Futures Customer Agreement between MS & Co. and
the Partnership, and acknowledged and agreed to by Morgan
Stanley DW, dated as of June 6, 2000, is incorporated by
reference to Exhibit 10.02 of the Partnership's Form 8-K
(File No. 0-26338) filed with the Securities and Exchange
Commission on November 1, 2001.
10.12 Customer Agreement between the Partnership and MSIL,
dated as of May 1, 2000, is incorporated by reference to
Exhibit 10.04 of the Partnership's Form 8-K (File No.
0-26338) filed with the Securities and Exchange
Commission on November 1, 2001.
10.13 Foreign Exchange and Options Master Agreement between MS
& Co. and the Partnership, dated as of April 30, 2000, is
incorporated by reference to Exhibit 10.05 of the
Partnership's Form 8-K (File No. 0-26338) filed with the
Securities and Exchange Commission on November 1, 2001.
10.14 Securities Account Control Agreement among the
Partnership, MS & Co., and Morgan Stanley DW, dated as of
May 1, 2000, is incorporated by reference to Exhibit
10.03 of the Partnership's Form 8-K (File No. 0-26338)
filed with the Securities and Exchange Commission on
November 1, 2001.
99.01 Certification of Periodic Financial Reports.

(B) Reports on Form 8-K. - None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Spectrum Technical L.P.
(Registrant)

By: Demeter Management Corporation
(General Partner)

August 14, 2002 By:/s/Raymond E. Koch _
Raymond E. Koch
Chief Financial Officer

The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Spectrum
Technical L.P. (the "Partnership") on Form 10-Q for the period
ended June 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Robert E. Murray,
President, Demeter Management Corporation, general partner of the
Partnership, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) The Report fully complies with the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/Robert E. Murray

Name: Robert E. Murray
Title: Chairman of the Board and President

Date: August 14, 2002

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Morgan Stanley Spectrum
Technical L.P. (the "Partnership") on Form 10-Q for the period
ended June 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Raymond E. Koch,
Chief Financial Officer, Demeter Management Corporation, general
partner of the Partnership, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/Raymond E. Koch

Name: Raymond E. Koch
Title: Chief Financial Officer

Date: August 14, 2002