Term sheet

To prospectus dated November 21, 2008,

prospectus supplement dated November 21, 2008 and

product supplement no. 39-A-III dated May 6, 2009

05-#17-2011-R

Term Sheet

Product Supplement No. 39-A-III

Registration Statement No. 333-155535

Dated May 24, 2011; Rule 433

The notes are designed for investors who seek a return of two times the appreciation of the PHLX Oil Service Sector^SM Index up to a maximum total return on the notes of at least 28.30%* at maturity. Investors should be willing to forgo interest and dividend payments and, if the Ending Index Level is less than the Initial Index Level, be willing to lose some or all of their principal. Any payment on the notes is subject to the credit risk of JPMorgan Chase & Co.

Senior unsecured obligations of JPMorgan Chase & Co. maturing June 13, 2012^†

Minimum denominations of $10,000 and integral multiples of $1,000 in excess thereof

The notes are expected to price on or about May 27, 2011 and are expected to settle on or about June 2, 2011.

If the Ending Index Level is greater than the Initial Index Level, at maturity you will receive a cash payment that provides you with a return per $1,000 principal amount note equal to the Index Return multiplied by 2, subject to a Maximum Total Return on the notes of at least 28.30%*. For example, assuming a Maximum Total Return of 28.30%, if the Index Return is equal to or greater than 14.15%, you will receive the Maximum Total Return on the notes of 28.30%*, which entitles you to a maximum payment at maturity of $1,283* for every $1,000 principal amount note that you hold. Accordingly, if the Index Return is positive, your payment per $1,000 principal amount note will be calculated as follows, subject to the Maximum Total Return:

$1,000 +($1,000 × Index Return × 2)

*The actual Maximum Total Return on the notes and the actual maximum payment at maturity will be set on the pricing date and will not be less than 28.30% and $1,283 per $1,000 principal amount note, respectively.

Your investment will be fully exposed to any decline in the Index, if the Ending Index Level is equal to the Initial Index Level, you will receive the principal amount of your notes at maturity.

If the Ending Index Level is less than the Initial Index Level, you will lose 1% of the principal amount of your notes for every 1% that the Ending Index Level is less than the Initial Index Level and your payment at maturity per $1,000 principal amount note will be calculated as follows:

$1,000 + ($1,000 × Index Return)

You will lose some or all of your investment at maturity if the Ending Index Level is less than the Initial Index Level.

Ending Index Level – Initial Index Level

Initial Index Level

The closing level of the Index on the pricing date, which is expected to be on or about May 27, 2011

Subject to postponement in the event of a market disruption event and as described under “Description of Notes — Payment at Maturity” in the accompanying product supplement no. 39-A-III

Per note

Total

Product supplement no. 39-A-III dated May 6, 2009:

Prospectus supplement dated November 21, 2008:

Prospectus dated November 21, 2008:

JPMorgan Structured Investments —

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CAPPED APPRECIATION POTENTIAL — The notes provide the opportunity to enhance equity returns by multiplying a positive Index Return by 2, up to the Maximum Total Return on the notes. The Maximum Total Return will be set on the pricing date and will not be less than 28.30%, and accordingly, the maximum payment at maturity will not be less than $1,283 per $1,000 principal amount note. Because the notes are our senior unsecured obligations, payment of any amount at maturity is subject to our ability to pay our obligations as they become due.

RETURN LINKED TO THE PHLX OIL SERVICE SECTOR^SM INDEX — The return on the notes is linked to the PHLX Oil Service Sector^SM Index. The Index is a price-weighted index and is designed to track the performance of a set of companies whose primary lines of business are directly associated with the U.S. oil services market. Currently, the Index is composed of fifteen companies that provide oil drilling and production services, oil field equipment, support services and geophysical/reservoir services. For additional information about the PHLX Oil Service Sector^SM Index, see the information set forth in Appendix A.

CAPITAL GAINS TAX TREATMENT — You should review carefully the section entitled “Certain U.S. Federal Income Tax Consequences” in the accompanying product supplement no. 39-A-III. Subject to the limitations described therein, and based on certain factual representations received from us, in the opinion of our special tax counsel, Davis Polk & Wardwell LLP, it is reasonable to treat the notes as “open transactions” for U.S. federal income tax purposes. Assuming this characterization is respected, the gain or loss on your notes should be treated as long-term capital gain or loss if you hold your notes for more than a year, whether or not you are an initial purchaser of notes at the issue price. However, the Internal Revenue Service (the “IRS”) or a court may not respect this characterization or treatment of the notes, in which case the timing and character of any income or loss on the notes could be significantly and adversely affected. In addition, in 2007 Treasury and the IRS released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward contracts” and similar instruments, such as the notes. The notice focuses in particular on whether to require holders of these instruments to accrue income over the term of their investment. It also asks for comments on a number of related topics, including the character of income or loss with respect to these instruments; the relevance of factors such as the nature of the underlying property to which the instruments are linked; the degree, if any, to which income (including any mandated accruals) realized by Non-U.S. Holders should be subject to withholding tax; and whether these instruments are or should be subject to the “constructive ownership” regime, which very generally can operate to recharacterize certain long-term capital gain as ordinary income and impose an interest charge. While the notice requests comments on appropriate transition rules and effective dates, any Treasury regulations or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment in the notes, possibly with retroactive effect. Both U.S. and Non-U.S. Holders should consult their tax advisers regarding the U.S. federal income tax consequences of an investment in the notes, including possible alternative treatments and the issues presented by this notice. In addition, based on certain factual assumptions and representations received from us, our special tax counsel is of the opinion that withholding under Sections 897 and 1445 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (collectively, “FIRPTA”) should not be imposed on proceeds paid to Non-U.S. Holders, although it is possible that we may decide (or that the IRS could argue) that we are required to do so. However, under a different set of rules, Non-U.S. Holders may in any event be withheld upon at a rate of up to 30% unless they have submitted a properly completed IRS Form W-8BEN or otherwise satisfied the applicable documentation requirements.

YOUR INVESTMENT IN THE NOTES MAY RESULT IN A LOSS — The notes do not guarantee any return of principal. The return on the notes at maturity is linked to the performance of the Index and will depend on whether, and the extent to which, the Index Return is positive or negative. Your investment will be exposed to loss if the Ending Index Level is less than the Initial Index Level. For every 1% that the Ending Index Level is less than the Initial Index Level, you will lose an amount equal to 1% of the principal amount of your notes. Accordingly, you could lose some or all of your initial investment at maturity.

YOUR MAXIMUM GAIN ON THE NOTES IS LIMITED TO THE MAXIMUM TOTAL RETURN — If the Ending Index Level is greater than the Initial Index Level, for each $1,000 principal amount note, you will receive at maturity $1,000 plus an additional amount that will not exceed a predetermined percentage of the principal amount, regardless of the appreciation in the Index, which may be significant. We refer to this percentage as the Maximum Total Return, which will be set on the pricing date and will not be less than 28.30%.

CREDIT RISK OF JPMORGAN CHASE & CO. — The notes are subject to the credit risk of JPMorgan Chase & Co. and our credit ratings and credit spreads may adversely affect the market value of the notes. Investors are dependent on JPMorgan Chase & Co.’s ability to pay all amounts due on the notes at maturity, and therefore investors are subject to our credit risk and to changes in the market’s view of our creditworthiness. Any decline in our credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to affect adversely the value of the notes.

POTENTIAL CONFLICTS — We and our affiliates play a variety of roles in connection with the issuance of the notes, including acting as calculation agent and hedging our obligations under the notes. In performing these duties, the

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economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the notes.

CERTAIN BUILT-IN COSTS ARE LIKELY TO AFFECT ADVERSELY THE VALUE OF THE NOTES PRIOR TO MATURITY — While the payment at maturity, if any, described in this term sheet is based on the full principal amount of your notes, the original issue price of the notes includes the agent’s commission and the estimated cost of hedging our obligations under the notes. As a result, and as a general matter, the price, if any, at which JPMS will be willing to purchase notes from you in secondary market transactions, if at all, will likely be lower than the original issue price and any sale prior to the maturity date could result in a substantial loss to you. This secondary market price will also be affected by a number of factors aside from the agent’s commission and hedging costs, including those set forth under “Many Economic and Market Factors Will Influence the Value of the Notes” below. The notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your notes to maturity.

NO INTEREST OR DIVIDEND PAYMENTS OR VOTING RIGHTS — As a holder of the notes, you will not receive interest payments, and you will not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of shares of the equity securities composing Index would have.

YOUR RETURN IS LINKED TO THE PERFORMANCE OF A SINGLE INDUSTRY – All of the securities underlying the PHLX Oil Service Sector^SM Index are issued by companies whose primary lines of business are directly associated with the oil services industry. Because the value of the notes is linked to the performance of the Index, an investment in these notes will be concentrated in this industry. As a result, the value of the notes may be subject to greater volatility and be more adversely affected by a single economic, political or regulatory occurrence affecting this industry than a different investment linked to securities of a more broadly diversified group of issuers. In addition, the oil services industry is significantly affected by a number of factors, including:

oil prices;

expenditures and investments in oil exploration and other services by the oil industry;

worldwide and domestic supplies of, and demand for oil and related products, including the discovery rate of new oil reserves and the depletion rate of existing oil reserves;

the cost of exploring for, developing, producing, and delivering oil and related products;

technological advances and developments in the oil services industry;

changes in weather patterns and climatic changes;

the ability of the members of Organization of Petroleum Exporting Countries and other producing nations to agree to and maintain production levels;

the worldwide military and political environment, uncertainty or instability resulting from an escalation or additional outbreak of armed hostilities or further acts of terrorism in the United States, or elsewhere;

federal, state, local and foreign laws and regulations concerning oil exploration, development, production and delivery, the environment and taxes;

the price and availability of alternative and competing fuels;

general economic conditions worldwide.

THERE IS NO DIRECT CORRELATION BETWEEN THE VALUE OF THE NOTES OR THE LEVEL OF THE PHLX OIL SERVICE SECTOR^SM INDEX AND ENERGY PRICES — There is no direct linkage between the level of the PHLX Oil Service Sector^SM Index and energy prices in specific regions or energy prices in general. While energy prices may be one factor that could affect the prices of the stocks composing the PHLX Oil Service Sector^SM Index and consequently the closing level of the PHLX Oil Service Sector^SM Index, the PHLX Oil Service Sector^SM Index and the notes are not directly linked to movements of energy prices and may be affected by factors unrelated to such movements.

LACK OF LIQUIDITY — The notes will not be listed on any securities exchange. JPMS intends to offer to purchase the notes in the secondary market but is not required to do so. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the notes easily. Because other dealers are not likely to make a secondary market for the notes, the price at which you may be able to trade your notes is likely to depend on the price, if any, at which JPMS is willing to buy the notes.

MANY ECONOMIC AND MARKET FACTORS WILL INFLUENCE THE VALUE OF THE NOTES — In addition to the level of the Index on any day, the value of the notes will be affected by a number of economic and market factors that may either offset or magnify each other, including:

the expected volatility of the Index;

the time to maturity of the notes;

the dividend rates on the equity securities underlying the Index;

interest and yield rates in the market generally as well as in the markets of the equity securities composing the Index;

developments in the oil services industry;

a variety of economic, financial, political, regulatory and judicial events; and

our creditworthiness, including actual or anticipated downgrades in our credit ratings.

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Company

Lufkin Industries Inc.

Schlumberger, Ltd.

Oceaneering International, Inc.

Baker Hughes International

National-Oilwell Varco, Inc.

Diamond Offshore Drilling, Inc.

Transocean Ltd.

Tidewater, Inc.

Cameron International Corporation

Halliburton Company

Noble Corporation

Rowan Companies, Inc.

Nabors Industries Ltd.

Weatherford International, Ltd.

Global Industries, Ltd.

Aggregate Adjusted Market Value

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a security must be listed on The NASDAQ Stock Market, the New York Stock Exchange, or NYSE Amex LLC;

the issuer of the security must be classified, as reasonably determined by NASDAQ OMX, as a company whose primary business is in the oil services sector;

only one class of security per issuer is allowed;

the security must have a market capitalization of at least $100 million;

the security must have traded at least 1.5 million shares in each of the last six months;

the security must have listed options on a recognized options market in the U.S. or be eligible for listed-options trading on a recognized options market in the U.S.;

the security may not be issued by an issuer currently in bankruptcy proceedings;

the issuer of the security may not have entered into a definitive agreement or other arrangement which would likely result in the security no longer being Index eligible;

the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn; and

the issuer of the security must have “seasoned” on a recognized market for at least 6 months; in the case of spin-offs, the operating history of the spin-off will be considered.

the security must be listed on The NASDAQ Stock Market, the New York Stock Exchange, or NYSE Amex LLC;

the issuer of the security must be classified, as reasonably determined by NASDAQ OMX, as a company whose primary business is in the oil services sector (Index Securities as of October 31, 2008 will be grandfathered for index classification purposes unless there is a material changes in their business line);

the security must have a market capitalization of at least $60 million;

the security may not be issued by an issuer currently in bankruptcy proceedings; and

the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn.

no single Index Security is greater than 20% of the weight of the Index and the top 5 Index Securities are not greater than 55% of the weight of the Index;

no more than 15% of the weight of the Index is composed of non-U.S. component securities that are not subject to comprehensive surveillance agreements;

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no single Index Security is greater than 25% of the weight of the Index and the top 5 Index Securities are not greater than 60% of the weight of the Index (measured semiannually the first trading day in January and July);

no more than 18% of the weight of the Index is composed of non-U.S. Index Securities that are not subject to comprehensive surveillance agreements;

the total number of Index Securities has not increased or decreased by 33 ¹/3% of the Index and in no event will be less than nine;

Index Securities representing at least 95% of the weight of the Index has a market capitalization of $75 million;

Index Securities representing at least 92% of the weight of the Index and at least 82% of the total number of Index Securities meet the security options eligibility rules; and

Index Securities must have trading volume of at least 600,000 shares for each of the last 6 months except that for each of the lowest weighted Index Securities that in the aggregate account for no more than 5% of the weight of the Index, trading volume must be at least 500,000 shares for each of the last six months.

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JPMorgan Structured Investments —

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