MORGAN STANLEY SPECTRUM TECHNICAL LP - 10-Q Quarterly Report

Back to GetFilings.com

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, 2004 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
825 Third Avenue, 9th Floor
New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 310-6444

(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___________

Indicate by check-mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).

Yes No X
MORGAN STANLEY SPECTRUM TECHNICAL L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2004

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

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

of these financial statements.
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, 2004 and 2003
(Unaudited)

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

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

June 30, 2004

(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, 2003 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
Currency L.P., Morgan Stanley Spectrum Global Balanced L.P.,
Morgan Stanley Spectrum Select L.P., and Morgan Stanley Spectrum
Strategic L.P.

The Partnership's general partner is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Morgan Stanley DW Inc. ("Morgan Stanley DW"). The clearing
commodity brokers are Morgan Stanley & Co. Incorporated ("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, John W. Henry & Company, Inc., and Winton Capital
Management Limited (individually, a "Trading Advisor", or
collectively, the "Trading Advisors").

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. The Partnership pays brokerage fees to Morgan
Stanley DW.

3. Financial Instruments
The Partnership trades 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. Futures and forwards represent contracts
MORGAN STANLEY SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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 Standards 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:

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

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 (losses) 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 (Losses)
on Open Contracts Longest Maturities

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

Jun. 30, 2004 (10,929,992) (7,283,367) (18,213,359) Dec. 2005 Sep. 2004
Dec. 31, 2003 34,239,960 12,194,250 46,434,210 Dec. 2004 Mar. 2004

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

Exchange-traded futures, forward, and futures-styled options
contracts are marked to market on a daily basis, with variations
in value settled on a daily basis. Morgan Stanley DW, MS & Co.,
and MSIL, each as a futures commission merchant for the
Partnership's exchange-traded futures, forward, 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, forward, and futures-styled options
contracts, including an amount equal to the net unrealized gains
(losses) on all open futures, forward, and futures-styled options
contracts, which funds, in the aggregate, totaled $603,404,522
and $517,752,016 at June 30, 2004 and December 31, 2003,
respectively. With respect to the Partnership's off-exchange-
traded forward currency contracts, there are no daily exchange-
required settlements of variations in value nor is there any
requirement that an amount equal to the net unrealized gains
(losses) on open forward contracts be segregated, however, MS &
Co. and Morgan Stanley DW will make daily settlements of losses
as needed. 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 such contracts, to
perform. The Partnership has a netting agreement with MS & Co.
This agreement, which seeks to reduce both the Partnership's and

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

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 and may be used as
margin solely for the Partnership's 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. 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 currencies. 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. For the periods covered by
this report, illiquidity has not materially affected the
Partnership's assets.

There are no known material trends, demands, commitments, events
or uncertainties 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.

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, that would affect, nor any expected material changes
to, the Partnership's capital resource arrangements at the
present time.

Off-Balance Sheet Arrangements and Contractual Obligations. The
Partnership does not have any off-balance sheet arrangements, nor
does it have contractual obligations or commercial commitments to
make future payments that would affect its liquidity or capital
resources.

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 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, 2004 and 2003 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 during
the period in question. Past performance is no guarantee
of futures results.
The Partnership's results of operations set forth in the financial
statements on pages 2 through 11 of this report were prepared in
accordance with accounting principles generally accepted in the
United States of America, 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 trading profit/loss" for open
(unrealized) contracts, and recorded as "Realized trading
profit/loss" when open positions are closed out, and the sum of
these amounts constitutes the Partnership's trading results. The
market value of a futures contract is the settlement price on the
exchange on which that futures contract is traded on a particular
day. 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. 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 relating to the application of
critical accounting policies other than those presently used could
reasonably affect reported amounts.

For the Quarter and Six Months Ended June 30, 2004
The Partnership recorded losses net of interest income totaling
$99,601,270 and expenses totaling $15,644,625, resulting in a net
loss of $115,245,895 for the quarter ended June 30, 2004. The
Partnership's net asset value per Unit decreased from $24.55 at
March 31, 2004 to $20.39 at June 30, 2004.

The most significant trading losses of approximately 8.0% were
recorded in the currency markets. During April, long positions
in the Japanese yen versus the U.S. dollar resulted in losses as
the U.S. dollar surged following the release of stronger-than-
expected U.S. jobs data. The yen also came under pressure
following efforts by the Japanese government to weaken the yen by
intervening in the currency markets. During May, short positions
in the Japanese yen versus the U.S. dollar incurred losses as the
U.S. dollar's value declined in response to fears of potential
terrorist attacks, expanding energy prices, and the release of
weaker-than-expected economic data during the latter half of May.
Additional sector losses resulted from cross-rate positions in
the euro versus the Australian dollar and the Swiss franc versus
the Japanese yen. During June, the currency markets continued to
prove difficult as losses were experienced primarily from short
positions in the Japanese yen versus the U.S. dollar. Better-
than-anticipated improvements in Japanese economic data and
speculation that the Bank of Japan would move to raise interest
rates led to a rise in the yen's value versus the dollar.
Additional Partnership losses of approximately 6.7% were incurred
in the global interest rate markets, primarily during April and
June. During April, long European, U.S., and Australian interest
rate futures positions sustained losses as prices tumbled
following the release of stronger-than-expected U.S. jobs data.
Short positions in European interest rate futures experienced
losses during June as prices reversed higher on weaker-than-
expected economics reports and diminished expectations that the
U.S. Federal Reserve would aggressively raise U.S. interest
rates. Additional losses stemmed from short positions in
Japanese interest rate futures as prices increased in June after
the Bank of Japan voted to maintain interest rates close to zero.
In the metals markets, losses of approximately 2.2% were recorded
largely during April from long positions in both precious and
base metals. The U.S. dollar propelled higher on positive
economic data and as a result long futures positions in gold and
silver recorded losses. Within the base metals markets, long
positions in copper and aluminum incurred losses as prices
weakened due to the strength of the U.S. dollar and fears of
reduced demand from China. Further Partnership losses of
approximately 1.1% stemmed from the global stock index markets.
Despite news indicating that a sustainable global economic
recovery was underway, global equity prices were weighed down
during April by the continuing difficulties in Iraq, fears of
global terrorism and concerns of higher interest rates.
Consequently, long positions in Asian and European stock indices
recorded losses. During May, losses resulted from long positions
in Japanese and European equity index futures as global
equity prices were negatively impacted by geopolitical concerns
and expanding energy prices. Smaller Partnership losses of
approximately 0.9% were recorded in the agricultural markets from
long corn and wheat futures positions as prices declined amid
news of lower U.S. exports and increased plantings in the U.S.
Corn Belt. A portion of the Partnership's overall losses during
the second quarter was offset by gains of approximately 3.5%
achieved in the energy markets during April and May. Long
futures positions in crude oil and its related products profited
during April as prices moved higher on fears of potential
terrorist activity in Saudi Arabia and news of problems with U.S.
refineries. Prices were later bolstered following a disclosure
from OPEC ministers regarding their intentions to discuss higher
price targets at their meeting in June. During May, the
Partnership generated further gains within the energy markets
from long positions as prices surged past $41 a barrel, reaching
twenty one-year highs, amid fears of terrorist attacks on Saudi
Arabian oil facilities and disruptions in Iraqi oil production.

The Partnership recorded losses net of interest income totaling
$27,259,617 and expenses totaling $42,083,860, resulting in a net
loss of $69,343,477 for the six months ended June 30, 2004. The
Partnership's net asset value per Unit decreased from $22.64 at
December 31, 2003 to $20.39 at June 30, 2004.

The most significant trading losses of approximately 7.1%
were incurred in the currency markets. Losses were incurred
during March from short positions in the Japanese yen versus the
U.S. dollar as the yen reversed higher due to speculation that
the Bank of Japan was relaxing its efforts to weaken the yen.
During April, long positions in the Japanese yen versus the U.S.
dollar resulted in losses as the dollar surged during the month
following the release of stronger-than-expected U.S. jobs data.
During May, short positions in the Japanese yen versus the U.S.
dollar sustained losses as the U.S. dollar's value declined in
response to fears of potential terrorist attacks, expanding
energy prices, and the release of weaker-than-expected economic
data during the latter half of May. During June, the currency
markets continued to prove difficult as losses were experienced
primarily from short positions in the Japanese yen versus the
U.S. dollar as better-than-anticipated improvements in Japanese
economic data and speculation that the Bank of Japan would move
to raise interest rates pushed the yen higher versus the dollar.
Losses of approximately 0.9% were experienced in the global stock
index markets during March, April, and May. Long positions in
European and U.S. stock index futures incurred losses during
those months as equity prices fell in response to the terror
attacks in Madrid, continuing difficulties in Iraq, fears of
global terrorism, and concerns of higher interest rates. In the
global interest rate markets, losses of approximately 0.8%
resulted primarily during April and June from positions in U.S.,
Australian, and European interest rate futures. During April,
long positions returned losses as prices tumbled following
the release of stronger-than-expected U.S. jobs data. Short
positions in European interest rate futures experienced losses
during June as prices reversed higher on weaker-than-expected
economics reports and diminished expectations that the U.S.
Federal Reserve would aggressively raise interest rates. Smaller
losses of approximately 0.6% were recorded in the agricultural
markets during January and throughout the second quarter,
primarily from positions in coffee futures. During January,
short coffee futures positions experienced losses as prices
reversed higher amid tight global supply and covering of short
positions. Long coffee futures positions experienced losses as
prices reversed lower during June in response to an increase in
Brazilian crop estimates and mild weather in growing regions.
Contributing to sector losses were long futures positions in
wheat and corn during April as prices reacted negatively in
response to news of lower U.S. exports and increased plantings in
the U.S. Corn Belt. A portion of the Partnership's overall
losses during the first six months of the year was offset by
gains of approximately 5.8% achieved in the energy markets during
February, April, and May. Long futures positions in crude oil
and its related products benefited during February from lower
market supply, falling inventory levels and an announcement from
OPEC stating that members would cut production. During April and
May, prices moved higher amid fears of potential terrorist
activity in Saudi Arabia and news of problems with U.S.
refineries. Prices were later bolstered following a disclosure
from OPEC ministers regarding their intentions to discuss
higher price targets at their meeting in June.
For the Quarter and Six Months Ended June 30, 2003
The Partnership recorded revenues including interest income
totaling $9,441,031 and expenses totaling $10,487,357, resulting
in a net loss of $1,046,326 for the quarter ended June 30, 2003.
The Partnership's net asset value per Unit decreased from $20.10
at March 31, 2003 to $20.08 at June 30, 2003.

The most significant trading losses of approximately 2.1% were
incurred in the metals markets, primarily during June, from long
gold futures positions as prices dropped counter to the rise of
the U.S. dollar. Further losses in this sector were provided by
long positions in aluminum and copper futures as prices declined
in anticipation of the U.S. Federal Reserve's interest rate cut
and on technically based selling. Additional losses of
approximately 2.0% in the agricultural markets were recorded
primarily during June from short futures positions in cotton as
supply concerns triggered by adverse weather conditions in the
U.S. and increased exports forced cotton prices higher. Further
losses in this sector were experienced from long lean hog futures
positions as fears related to a potential outbreak of Mad Cow
Disease depressed prices. Smaller losses of approximately 0.5%
in the global stock index markets resulted during May from
positions in Japanese stock index futures as prices reversed
higher amid heavy buying by Japanese pension funds and renewed
hope for a government stimulus package. A portion of the
Partnership's overall losses for the second quarter was offset by
gains of approximately 5.5% in the currency markets during April
from long positions in the euro versus the U.S. dollar as
concerns regarding the U.S. economic recovery resurfaced and
resulted in the value of the dollar declining to a four-year low
versus the euro. Long positions in the euro versus the U.S.
dollar provided additional gains during May as the value of the
euro strengthened to an all-time high amid uncertainty regarding
the Bush Administration's economic policy, renewed fears of
potential terrorist attacks against American interests, and
investor preference for non-U.S. dollar denominated assets.
Currency gains were also recorded from long positions in the
Australian dollar versus the U.S. dollar as its value
strengthened in response to continued weakness in the U.S. dollar
and significant interest rate differentials between the two
countries. Additional gains of approximately 2.1% in the global
interest rate markets were recorded primarily during May from
long positions in U.S. and European interest rate futures as
prices trended higher amid speculation of an interest rate cut by
the Federal Reserve and lingering doubts concerning a global
economic recovery.

The Partnership recorded revenues including interest income
totaling $54,826,398 and expenses totaling $26,130,612, resulting
in net income of $28,695,786 for the six months ended June 30,
2003. The Partnership's net asset value per Unit increased from
$18.41 at December 31, 2002 to $20.08 at June 30, 2003.

The most significant trading gains of approximately 10.9% in the
currency markets were supplied during January from long positions
in the euro as its value strengthened versus the U.S. dollar amid
renewed fears of a military conflict with Iraq, increased
tensions with North Korea, and weak U.S. economic data. During
May, additional gains were recorded as the value of the euro
strengthened to an all-time high amid uncertainty regarding the
Bush Administration's economic policy, renewed fears of potential
terrorist attacks against American interests, and investor
preference for non-U.S. dollar denominated assets. Gains were
also recorded from long positions in the Australian dollar versus
the U.S. dollar as the Australian currency strengthened in
response to continued weakness in the U.S. dollar and a
significant interest rate differential between the two countries.
Additional gains of approximately 6.2% in the global interest
rate markets were recorded during January and February from
positions in U.S. interest rate futures as prices declined amid a
temporary increase in U.S. manufacturing activity and then
increased as investors continued to seek the safe haven of fixed
income investments in response to prolonged uncertainty in global
equity markets. Additional gains were recorded from long
positions in European and U.S. interest rate futures as strong
demand from investors seeking the security of fixed income
investments sent prices higher. During May, gains were provided
from long positions in U.S. and European interest rate futures as
prices trended higher amid speculation of an interest rate cut by
the U.S. Federal Reserve and lingering doubts concerning a
global economic recovery. Gains of approximately 3.8% were
recorded in the energy markets during January and February from
long positions in natural gas futures as prices increased in
response to prolonged frigid temperatures in the northeastern and
midwestern United States and fears that extremely cold weather
could further deplete already diminished supplies. Additional
gains were provided from long positions in crude oil futures as
prices trended higher amid fears that a military conflict with
Iraq could curb market supply. A portion of the Partnership's
gains was offset by losses of approximately 2.5% in the metals
markets from long positions in aluminum futures as prices fell
amid muted industrial demand during March. During June, long
positions in aluminum futures incurred additional losses as
prices declined in anticipation of the U.S. Federal Reserve's
interest rate cut and on technically based selling. Further
losses in this sector were provided by long gold futures
positions as prices dropped counter to the rise of the U.S.
dollar. Additional losses of approximately 2.4% stemmed from the
agricultural markets, primarily during June, as short futures
positions in cotton suffered losses due to an increase in prices
spurred by supply concerns.
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 inherent to the primary business activity
of the Partnership.

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, factors that result in frequent
changes in the fair value of the Partnership's open positions,
and consequently in its earnings, whether realized or unrealized,
and cash flow. Gains and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin. Gains/losses on off-exchange-traded forward
currency contracts are settled at the termination of the contract
or more frequently, as agreed upon with each counterparty.

The Partnership's total market risk may increase or decrease as
it is influenced by a wide variety of factors, including, but not
limited to, the diversification among the Partnership's
open positions, the volatility present within the markets, and
the liquidity of the markets.

The Partnership's past performance is no guarantee 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.

Limited partners will not be liable for losses exceeding the
current net asset value of their investment.

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 and cash flow.

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 Partnership estimates VaR using a model based upon
historical simulation (with a confidence level of 99%) which
involves constructing a distribution of hypothetical daily changes
in the value of a trading portfolio. The VaR model takes into
account linear exposures to risk including 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 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, or one day in 100.
VaR typically does not represent the worst case outcome. 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.
The Partnership's VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments. They are also not based on exchange
and/or dealer-based maintenance margin requirements.

VaR models, including the Partnership's, are continually 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, 2004 and 2003. At
June 30, 2004 and 2003, the Partnership's total capitalization
was approximately $610 million and $414 million, respectively.

Primary Market June 30, 2004 June 30, 2003
Risk Category Value at Risk Value at Risk

Equity (1.70)% (1.23)%
Currency (1.06) (1.59)
Interest Rate (0.79) (1.35)
Commodity (1.21) (1.22)
Aggregate Value at Risk (2.55)% (2.72)%

The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
category. The Aggregate Value at Risk listed above represents
the 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.

Because the business of the Partnership 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, which could
positively or negatively materially impact market risk as
measured by VaR.

The table below supplements the quarter-end VaR set forth above
by presenting the Partnership's high, low, and average VaR, as a
percentage of total net assets for the four quarter-end
reporting periods from July 1, 2003 through June 30, 2004.

Primary Market Risk Category High Low Average
Equity (1.97)% (0.91)% (1.56)%
Currency (2.48) (0.58) (1.50)
Interest Rate (1.94) (0.79) (1.21)
Commodity (2.04) (1.13) (1.46)
Aggregate Value at Risk (3.47)% (2.55)% (3.14)%

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 market fluctuations applied to current
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 provided 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, 2004 and 2003, and for the four
quarter-end reporting periods from July 1, 2003 through June 30,
2004. VaR is not necessarily representative of the Partnership's
historic risk, nor should it be used to predict 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.

The Partnership also maintains a substantial portion
(approximately 87% as of June 30, 2004) of its available assets
in cash at Morgan Stanley DW. A decline in short-term interest
rates would 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, 2004, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Equity. The primary market exposure of the Partnership at June
30, 2004 was to equity price risk in the G-7 countries. The G-7
countries consist of France, the U.S., Britain, Germany, Japan,
Italy, and Canada. The stock index futures traded by the
Partnership are by law limited to futures on broadly-based
indices. At June 30, 2004, the Partnership's primary exposures
were to the Euro Stoxx 50 (Europe), S&P 500 (U.S.), CAC 40
(France), Dax (Germany), Nikkei (Japan), and Dow Jones Industrial
Average (U.S.) stock indices. The Partnership is exposed to the
risk of adverse price trends or static markets in the U.S.,
European, and Japanese stock indices. Static markets would not
cause major market changes, but would make it difficult for the
Partnership to avoid trendless price movements, resulting in
numerous small losses.

Currency. The second largest market exposure of the Partnership
at June 30, 2004 was to the currency sector. 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,
2004, the Partnership's major exposures were to euro, Japanese
yen, Australian dollar, British pound, Swiss franc, Canadian
dollar, New Zealand dollar, Swedish krona, and Norwegian krone
currency crosses, as well as 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.

Interest Rate. The third largest market exposure of the
Partnership at June 30, 2004 was to the global interest rate
sector. Exposure was primarily spread across the U.S., European,
Japanese, and Australian 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 interest rate exposure is
generally to interest rate fluctuations in the U.S. and the other
G-7 countries. However, the Partnership also takes futures
positions in the government debt of smaller countries - e.g.,
Australia. Demeter anticipates that G-7 countries and Australian
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.

Commodity.
Soft Commodities and Agriculturals. At June 30, 2004, the
Partnership had exposure to the markets that comprise these
sectors. Most of the exposure was to the cocoa, coffee,
lean hogs, and live cattle markets. Supply and
demand inequalities, severe weather disruptions and market
expectations affect price movements in these markets.
Energy. At June 30, 2004, 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 geopolitical developments,
particularly in the Middle East, as well as 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 the future.
Natural gas has exhibited volatility in prices resulting
from weather patterns and supply and demand factors and will
likely continue in this choppy pattern.

Metals. The Partnership's metals exposure at June 30, 2004
was to fluctuations in the price of precious metals, such as
gold, silver, and to a lesser extent, platinum and
palladium. The Partnership also had exposure to 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,
and Demeter anticipates that the Partnership will continue
to do so.

Qualitative Disclosures Regarding Non-Trading Risk
Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2004:

Foreign Currency Balances. The Partnership's primary foreign
currency balances at June 30, 2004 were in euros, New
Zealand dollars, and Australian dollars. The Partnership
controls the non-trading risk of foreign currency 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 by
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.

Item 4. CONTROLS AND PROCEDURES

(a) As of the end of the period covered by this quarterly
report, the President and Chief Financial Officer of
Demeter, the general partner of the Partnership, have
evaluated the effectiveness of the Partnership's
disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act), and have
judged such controls and procedures to be effective.

(b) There have been no significant changes during the
period covered by this quarterly report in the
Partnership's internal controls or in other factors
that could significantly affect these controls
subsequent to the date of their evaluation.

\

PART II. OTHER INFORMATION

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Partnership initially registered 4,000,000 Units pursuant to
a Registration Statement on Form S-1, which became effective on
September 15, 1994 (SEC File Number 33-80146).

The Partnership registered an additional 9,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on January 31, 1996 (SEC File Number 333-00494).

The Partnership registered an additional 5,000,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on April 30, 1996 (SEC File Number 333-3222).

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 Partnership registered an additional 10,000,000 Units
pursuant to another Registration Statement on Form S-1, which
became effective on April 28, 2003 (SEC File Number 333-104001).

The Partnership registered an additional 40,000,000 Units
pursuant to another Registration Statement on Form S-1, which
became effective on April 28, 2004 (SEC File Number 333-113397).

The managing underwriter for the Partnership is Morgan Stanley
DW.

Units are continuously sold at monthly closings at a purchase
price equal to 100% of the net asset value per Unit as of the
close of business on the last day of each month.

Through June 30, 2004, 45,566,439.214 Units were sold, leaving
38,433,560.786 Units unsold. The aggregate price of the Units
sold through June 30, 2004 was $751,775,501.

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 the prospectus included as a part of the
above referenced Registration Statements.

Item 5. OTHER INFORMATION
Management. Effective June 21, 2004, the following changes have
been made to the Board of Directors and Officers of Demeter:

Mr. Jeffrey D. Hahn resigned the position of Chief Financial
Officer and Director of Demeter.

Mr. Todd Taylor, age 41, is a Director of Demeter. Mr. Taylor
began his career with Morgan Stanley in June 1987 as a Financial
Advisor in the Dallas office. In 1995, he joined the Management
Training Program in New York and was appointed Branch Manager in
St. Louis in 1997. Three years later, in 2000, Mr. Taylor was
appointed to a newly created position, Director of Individual
Investor Group ("IIG") Learning and Development, before becoming
the Director of IIG Strategy in 2002. Most recently, Mr. Taylor
has taken on a new role as the High Net Worth Segment Director.
Currently a member of the firm's E-Learning Council, Mr. Taylor
is also a current member of the Securities Industry/Regulatory
Council on Continuing Education. Mr. Taylor graduated from Texas
Tech University with a B.B.A. in Finance.

Mr. William D. Seugling, age 34, will become a Director of
Demeter once he has registered with the National Futures
Association ("NFA") as a principal, which registration is
currently pending. Mr. Seugling is an Executive Director at
Morgan Stanley and currently serves as Director of Client
Solutions for US Private Wealth Management. Mr. Seugling joined
Morgan Stanley in June 1993 as an Associate in Equity Structured
Products having previously worked in research and consulting for
Greenwich Associates from October 1991 to June 1993. Since 1994,
he has focused broadly on analysis and solutions for wealthy
individuals and families culminating in his current role within
the division. He was named Vice President in 1996 and an
Executive Director in 1999. Mr. Seugling graduated cum laude
from Bucknell University with a B.S. in Management and a
concentration in Chemistry.

Mr. Kevin Perry, age 35, is the Chief Financial Officer of
Demeter. His registration with the NFA as a principal is
currently pending. He currently serves as an Executive Director
and Controller of Client Solutions at Morgan Stanley. Mr. Perry
joined Morgan Stanley in October 2000 and is also Chief Financial
Officer of Morgan Stanley Trust National Association, Van Kampen
Funds Inc. and Morgan Stanley Distribution, Inc. Prior to
joining Morgan Stanley, Mr. Perry worked as an auditor and
consultant in the financial services practice of Ernst & Young
from October 1991 to October 2000. Mr. Perry received a B.S.
degree in Accounting from the University of Notre Dame in 1991
and is a Certified Public Accountant.

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 28, 2004, filed with the Securities and
Exchange Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933 on May 4, 2004.
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 with the Securities
and Exchange Commission on March 31, 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
10.02 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 with the
Securities and Exchange Commission 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 with the Securities
and Exchange Commission on March 31, 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 10.01 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 purchasers of Units is
incorporated by reference to Exhibit B of the
Partnership's Prospectus, dated April 28, 2004, filed
with the Securities and Exchange Commission pursuant to
Rule 424(b)(3) under the Securities Act of 1993 on May 4,
2004.
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, as 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
28, 2004, as filed with the Securities and Exchange
Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933 on May 4, 2004.
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 No. 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.
31.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to rules 13a-15(e) and 15d-15(e), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to rules 13a-15(e) and 15d-15(e),
as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.

(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 16, 2004 By: /s/Kevin Perry
Kevin Perry
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.