Option Investor
Newsletter

Daily Newsletter, Thursday, 02/11/1999

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The Option Investor Newsletter         Thursday  2-11-99  
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

Posted online for subscribers at http://www.OptionInvestor.com

Also provided as a service to The Online Investor Advantage

Published three times weekly, Sunday, Tuesday, Thursday evenings.
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
        2-11-99         High     Low     Volume   Advances Decline
DOW     9363.46 +186.15 9363.46  9143.33  797,413k  1,777   1,178
Nasdaq  2405.55 + 96.06 2405.76  2326.19  965,686k  2,304   1,587 
S&P-100  628.27 + 15.84  628.27   611.81   Totals   4,081   2,765
S&P-500 1254.04 + 30.49 1254.05  1223.36            59.6%   40.4%
$RUT     406.16 +  8.20  406.19   397.96
$TRAN   3161.76 + 42.56 3172.14  3118.00
VIX       28.17 -  3.27   31.83    27.96
Put/Call Ratio      .52
*************************************************************

Ok, Ralph, Tom, Barton, Dick...Did we miss the correction ?


The market correction brought on by the avalanche of negative
pronouncements by the four horsemen of the apocalypse, Ralph
Acompora, Tom Kurlak, Barton Biggs and Dick McCabe, seems to
have taken a wrong turn after the tech wreck.

The confluence of six forecasters, I don't remember the other
two names, all predicting a serious correction in the same week,
should have been the signal to buy in any market. The odds of 
something actually happening after such a public barrage of 
negativity is infinitesimal. The herd concept works for herds of
analysts just like it does for us common people. You have heard
it many times, "If the herd is thinking one way then the other
direction is probably the correct one." I actually know people
who look for the options with the highest open interest then
open the opposite position. This has some positive points but
that is for another day.

The tech rally exploded back to life in a very positive
session today. The largest single day point gain in history
came only three days from the third largest point drop in
history. Key point here...go back and look for huge point
drops on the Nasdaq or the Dow and normally you will see
a similar rise within three days. Overbought to oversold
to overbought, etc, etc. This is trend trading in it's
simplest form. More on that later also.

The tech leaders posted some huge gains. SUNW +7.88, 
DELL +4.88, MSFT +2.13, INTC +4.44. The gains were not 
limited to Nasdaq techs but NYSE tech stocks also came to 
play. EMC +6.06, AOL +13.81, IBM +9.63, XRX +3.81 (after +5 
yesterday). Does anybody think we could have some profit
taking in these stocks tomorrow ?

The Internets exploded again on the CNET earnings and stock
split as well as the successful Prodigy and Vertical Net IPOs
today.

Volume was good but not great. Advancers finally beat declines
after losing seven of the last eight days. The margin was not
great and analysts were watching all day for signs of slippage.
With only a +600 edge on the NYSE traders were thinking there
was still hesitancy to jump back in until AFTER the three day
weekend. Tomorrow will probably be choppy again as traders
take some quick profits but the more risk averse buyers could
be looking for bargains now that the "correction" appears to
be over. It is funny how quickly analysts can go from predicting
a retest of Nasdaq 2000 on Tuesday to predicting a retest of
Nasdaq 2500 only two days later. Which way is the wind blowing
today guys?? Got to be tough to be a talking head with no clue
to market direction.

Something that became evident in my own trading and in the 
emails I received this week was the focus on loser syndrome.
If you bought the dip on Monday then the dip on Tuesday put
a serious crimp in your portfolio. I will be the first to
admit, I broke several of the Top Ten Rules on Monday and
suffered on Tuesday. With a strict interpretation you could
probably say I broke all ten. Nobody's perfect !! My biggest
mistake was buying too many different stocks on Monday and
then more on Tuesday. A total of nine positions! With nine 
different positions you can't pay attention to the intraday
subtleties as close as needed. When things start going south
you cannot make a rational decision on each one separately
and after making a decision you cannot act on it in a timely
manner. The more contracts you own the bigger the problem
in making a hasty exit. After the drop catches you looking
the other way you are left with several losing positions.

With the big hit on Tuesday I had several big losses staring
back from my screen. Here is the point. When you have losing
positions you tend to focus on those positions on a minute
by minute basis. The larger positions on a tick by tick
basis. It is as if you are trying to "hope" them back to 
positive. Now if 98% of your focus is on the current losers
then you can't focus on starting new plays. In a market that
was so severely oversold as the Nasdaq on Tuesday/Wednesday
you missed dozens of opportunities to make big bucks on
today's rally. Look at all the +$3, $4, $5, $6, $10 gains
today. If you had not been focused on the losers then you
coulda, woulda, shoulda have made some good plays on the 
rebound. Anybody dropped for a loss on Tuesday knows what 
I am talking about. How do you prevent this? STOP LOSSES! 
Physical or mental. If your broker does not allow stop 
losses then you have to be more vigilant in placing sells 
when things go wrong. The key is to know your exits before
you enter a play. You have all heard it before over and over. 
Profit from it !! Limit your plays to three positions and 
not more than five. I would rather you trade more contracts
in just three positions than spread yourself too thin. The
more positions you play the better chance of hitting a
loser. Set a stop loss. Stick to it. If you get stopped out
then don't whine, just start looking for a new target to
play on the rebound. Above all WAIT FOR THE REBOUND. Today
was the rebound! I get many emails asking how you can tell
when the rebound starts. CLUE: It looks like this morning!
All stocks moving up, not just certain ones. 

Sorry for the quick lesson but I got a ton of email this
week that needed this info repeated. Sunday we are going 
to answer the question "how do I know for sure it is a
rising market?" I get this one a lot. I will go over the
indicators I watch to decide when I want to make a play.

Friday could open down on profit taking. Remember the big
move correlation above. Big moves are normally followed
by moves in the opposite direction. In this cycle a move
down on Friday would not be very strong due to pent up
buying and buyers who missed today's move. If it is going
to recover from the drop it should be quickly. We closed
at the absolute highs of the day which is good. Futures
are flat and no help tonight. Could be a good morning for
target shooting.

Good Luck

Jim Brown


*******************************************************
BROKERS CORNER
*******************************************************
The Problem With Stopping

From my previous articles on the subject, many of you must
be wondering why even attempting to use stop orders. Well,
I have another rule that I need to tell everyone about.

The question is, "What happens if the BID skips over the 
desired stop price/level?" The answer is that if the ASK 
is the same price as your price, then the stop order is 
initiated. If it is a normal stop order, the option is 
sold/bought at the market when the target price is equal 
to the ASK. If the order is a Stop Limit, then the order 
is triggered as a limit order when the ASK is equal to the
target price. The stop limit order is usually more difficult
to get filled if the stock/index continues to decline. 
However, if you are fortunate, the stock/index will bounce 
enough to fill your limit order at the ASK.

But wait. Just when you thought there was a solution to 
one of the problems with stops, there is another problem. 
On stocks with multiple option exchanges there are often 
multiple BIDS and ASKS. Your order may be on one of four 
exchanges. One of the other exchanges that your stop order
is placed offers the option at your stop price. But the 
exchange you order is on never hits that price. Are you 
entitled. The floor trader has to see the other exchange's
BID and ASK for you to be filled on your stop. In a fast 
market, he/she may not see it. You may not be executed. Oh,
but then again, you will be EXECUTED!! You have no recourse!
I know this because it has happened. The only way to obtain
recourse is if you are watching all exchanges tick for tick
and can prove that the BID and ASK hit your price level. 
This may be the only way. However, I am probably mistaken 
about haw to obtain recourse. If anyone knows for sure 
from experience, please E Mail me. I hope this was informative.
If there are any additional or specific questions, please EMail
or call.

Robert J. Ogilvie 
He is an Investment Broker and Registered Options Principal 
with Baxter, Banks & Smith, Ltd., a full service firm in 
Sarasota, FL. He specializes in various portfolio hedging 
and option trading strategies using both equity and index
options. Especially the OEX and SPX. He enjoys educating 
investors on the many facets of options trading. He 
concentrates his efforts to client's needs and objectives.
 
Phone: 1-800-982-2119 
Email: RJOgil@aol.com 


*******************************************************
Market Posture
*******************************************************
Market Posture

As of Market Close - Thursday, February 11, 1999 

                   Key Benchmarks
Broad Market       Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************

DOW Industrials    9,200   9,500   9,363    Neutral   2.11 *
SPX S&P 500        1,240   1,280   1,254    Neutral   2.11 *
OEX S&P 100          625     635     628    Neutral   2.11 *
RUT Russell 2000     420     435     406    BEARISH   2.4    

NDX NASD 100       1,900   2,150   2,045    Neutral   2.2  
MSH High Tech        930   1,040     982    Neutral   2.11 *

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
XCI Hardware         900     970     911    Neutral   2.11 *
CWX Software         650     680     651    Neutral   2.11 *   
SOX Semiconductor    390     420     402    Neutral   2.11 *   
NWX Networking       400     450     413    Neutral   2.11 *   
INX Internet         470     570     499    Neutral   2.11 *

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
BIX Banking          630     675     642    Neutral   2.11 *
XBD Brokerage        630     700     680    Neutral   2.5      
IUX Insurance        570     610     585    Neutral   2.11 *

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
RLX Retail           840     880     861    Neutral   2.11 *    
DRG Drug             750     795     774    Neutral   2.11 *
HCX Healthcare       750     780     768    Neutral   2.11 *
XAL Airline          300     330     309    Neutral   1.29
OIX Oil & Gas        230     250     235    Neutral   2.4



Posture Alert

After several broad market indices and industry sectors 
reversed course at key benchmark levels near their respective 
50-day moving averages, we have turned Neutral once again. 
Today's rally was spearheaded by healthy leadership from the
technology, financial, drug and retail sectors.

A detailed description of our Market Posture and its
applications can be found at:

www.OptionInvestor.com/marketposture
 
 


******************************************************
Market Sentiment - By Pinnacle Capital Advisors
******************************************************
604, 635 630 Spells Lower Highs

One of the most important chart formations Pinnacle keeps an
eye on are lower highs.  From a technical point of view they
reveal classic failed rallies that can often presage continued
market sell offs.  Check out the S&P 100 index option (OEX) 
below and see if you see the same thing we do - a series of 
lower highs.

640 - Monday, February 1st
635 - Wednesday, February 3rd
630 - Thursday, February 11th


 
The next couple of days are absolutely key.  While the media
will report about today's big rally, stay focused on what is
really important - a rally that can support continued advances.
Given our technical and sentiment indicators, Pinnacle believes
that we are likely going to see a failed rally between 630-635. 


A detail breakdown of Pinnacle Capital Advisors' market
sentiment analysis together with supporting charts, graphs,
tables and explanations can be accessed through OI's
website at:

http://www.OptionInvestor.com/marketsentiment/index.asp



Market Sentiment at a Glance
********************************************************************   
                                Friday     Tues      Thurs  
Indicator                       (2/5)      (2/9)     (2/11)   Alert
********************************************************************

Pinnacle Index (OEX):          
-----------------------------------------------------------------
Overhead Resistance (640-655)    10.0        13.1         9.3
Underlying Support  (605-620)     1.9         1.2         1.4


Put/Call Ratios:
-----------------------------------------------------------------
CBOE Total P/C Ratio               .6          .5          .7
CBOE Equity P/C Ratio              .4          .4          .5                         
OEX P/C Ratio                     1.3          .8          .9 *  


Peak Open Interest (OEX):
-----------------------------------------------------------------
Puts                              610         610         610    
Calls                             660         660         660   
P/C Ratio                        1.13         .84        1.11    





Market Volatility Index (VIX):	
-----------------------------------------------------------------
CBOE VIX                        30.47       32.51       28.17 *



Investors Intelligence:
-----------------------------------------------------------------
Bullish                          60.0%       60.0%      61.7% *  
Bearish                          26.7%       26.7%      25.9% *
		





The Power of Sentiment Analysis

It has often been said that the crowd is right during the
market trends but wrong at both ends.  Measuring and
evaluating the sentiment of the crowd, therefore, can give
savvy option traders a decided edge.

 
Pinnacle Index
-----------------------------------------------------------------
OEX                             Friday     Tues     Thurs
Benchmark                       (2/5)      (2/9)    (2/11)
-----------------------------------------------------------------
               
                    (650-655)     45.5                 19.9
                    (640-645)      4.6                  7.1
Overhead Resistance (640-655)     10.0      13.1        9.3

OEX Close                       617.67    606.52     628.27

Underlying Support  (605-620)      1.9       1.2        1.4 
                    (615-620)      1.9                  1.0
                    (605-610)      1.8                  1.8

Average ratings: 
Resistance levels 2.0 / Support .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is Heavy at the OEX 640/655
level while the underlying support is weak at the
OEX 605/620 level.


Put/Call Ratio 
-----------------------------------------------------------------
                                Friday     Tues      Thurs
Strike/Contracts                (2/5)      (2/9)     (2/11) 
-----------------------------------------------------------------
CBOE Total P/C Ratio               .64       .52       .66 
CBOE Equity P/C Ratio              .42       .37       .50 
OEX P/C Ratio                     1.28       .81       .91


Peak Open Interest (OEX)
-----------------------------------------------------------------
                     Friday         Tues           Thurs
Strike/Contracts     (2/5)          (2/9)          (2/11)
-----------------------------------------------------------------
Puts                 610 / 14,679   610 / 15,136   610 / 16,211
Calls                660 / 12,988   660 / 15,139   660 / 14,597 
Put/Call Ratio       1.13           .84            1.11


 
 

 


Market Volatility Index (VIX)
-----------------------------------------------------------------
                    Major
Date                Turning Point       VIX
-----------------------------------------------------------------
October 97          Bottom              54.60      
July 20, 1998       Top                 16.88         
October 8, 1998     Bottom              60.63
January 11, 1998    Top                 26.38

February 9, 1999                        32.51   *
February 9, 1999                        28.17   *



 

 

Investors Intelligence Survey
-----------------------------------------------------------------
                    Major             Percent     Percent
Date                Turning Point     Bullish     Bearish
-----------------------------------------------------------------
October 97          Bottom            22.0        48.3       
July 20, 1998       Top               52.0        24.0         
October 8, 1998     Bottom            38.5        42.7
January 11, 1999    Top               58.3        30.0

February 11, 1999                     60.0        26.7   *





Please view this in COURIER 10 font for alignment
*****************************************************
RESULTS THIS WEEK

Index    Last    Mon    Tue   Wed   Thur    Week
Dow    9133.03 -13.13-158.08 44.28 186.15   59.22
Nasdaq 2310.79  31.30 -94.13 -1.29  96.05   31.93
$OEX    606.52   4.03 -15.18  5.91  15.84   10.60
$SPX   1216.14   4.37 -27.63  7.41  30.49   14.64
$RUT    403.13  -1.39  -8.20 -5.17   8.20   -6.56
$TRAN  3155.14 -38.41 -54.11-35.94  42.56  -85.90
$VIX     32.51  -0.04   2.08 -1.07  -3.27   -2.30

Stock   Price    Mon    Tue   Wed   Thur    Week

CLX     132.31  -1.00   3.13  5.50   3.81   11.44 Breakout
SUNW    105.31   3.88  -6.88 -0.19   7.88    4.69 Comeback Kid
WCOM     80.44   2.81  -2.31 -0.50   4.19    4.19 Beat estimates
LVLT     59.69   3.06  -1.06 -0.88   2.88    4.00 Earnings run
ORCL     59.56   1.19  -2.75 -0.94   5.88    3.38 Recovery
MWD      92.13  -0.44  -2.81 -1.06   7.44    3.13 Bounce
MSFT    162.75   5.25  -5.19  0.56   2.13    2.75 Lagging
GTW      74.00  -2.00  -0.38  3.00   1.38    2.00 New play
ANF      75.50   4.88  -4.88 -2.25   4.13    1.88 Ready 2 go
MCD      82.00   0.56  -0.63 -0.38   2.13    1.68 Splits soon
VISX     60.81   1.19  -1.63 -0.88   2.94    1.62 Improving
WMT      85.81   1.19  -3.31 -1.19   4.88    1.57 Earnings run
DELL    101.88   3.63  -6.25 -0.81   4.88    1.45 Earnings on 16th
WAG      61.50  -1.25  -0.75  0.50   2.31    0.81 Splits 2/12
AOL     164.69  -5.00 -11.00  2.94  13.81    0.69 Comeback Kid
LOW      54.69  -1.06  -1.06 -0.38   2.19   -0.31 Bounce
COMS     34.19  -0.13  -2.00 -1.50   3.25   -0.38 New play
DH       61.56  -0.75  -1.75 -0.88   2.81   -0.57 Reversal
EGRP     48.94  -3.19  -5.56  2.56   5.50   -0.69 New play
PSIX     36.25  -1.38  -3.38  0.63   3.00   -1.13 Earnings run
MEDI     51.13  -0.81  -1.94 -0.13   1.56   -1.32 Wait
VIA.B    82.50  -1.50  -1.19  0.63   0.38   -1.68 Slow mover
MDT      83.88  -2.06  -2.13 -0.69   2.00   -2.88 Wait
AA       86.38  -1.00  -0.38 -1.50  -0.25   -3.13 Dropped
CC       56.00  -3.75  -3.75 -1.25   2.38   -6.37 Lagging

Puts

WLA      68.94   0.69  -2.25 -1.56   0.56   -4.18 Below 50DMA
SPLN     40.13  -1.75  -4.63 -1.50   5.25   -2.63 Dropped
PHSYB    66.38   1.19  -1.81 -2.19   0.38   -2.43 Breaking down
BDX      35.06  -0.81  -1.00 -0.75   1.06   -1.50 Breaking down
MCHP     30.50  -0.63  -1.81  0.94   0.50   -1.00 Consolidating
ADBE     45.06   0.31  -2.69  0.75   0.63   -1.00 Pausing for direction
BMCS     46.75  -0.94  -3.19  0.94   2.88   -0.31
ERTS     41.06  -0.06  -0.94 -0.19   2.19    1.00
MRK     150.75   0.50  -4.50  0.88   4.50    1.38 Dropped
BKB      37.06  -0.50  -0.19  0.94   1.63    1.88 Below resistance
AXP     101.00  -1.06  -1.13  0.81   4.25    2.87 Relief rally ?
PG       88.44   1.44  -0.06  1.75   0.44    3.57 Pausing for direction
AVT      42.00   0.19   0.19  2.00   1.63    4.01 Dropped
BAC      64.94  -0.75  -0.25  1.88   3.31    4.19 Relief rally ?


PICKS WE DROPPED
****************
When we drop a pick it doesn't mean we are recommending a sell
on that play. Many dropped picks go on to be very profitable.
We drop a pick because something happened to change its
profile. News, price, direction, etc. We drop it because we
don't want anyone else starting a new play at that time. 
We have hundreds of new readers with each issue who are
unfamiliar with the previous history for that pick and we
want them to look at any current pick as a valid play.


CALLS:
******

AA $86.38 -.25 (-3.13) AA gapped down at the open on Wednesday
and has traded pretty flat since then.  We were disappointed
with it today given the good market move.  AA is still above
its 10 day moving average, but with the lack of movement today
we are going to drop them as a pick.  AA splits on 02/25, so 
there is still a chance for a pre-split run.

PUTS:
******

AVT - $42.00 +1.63 (3.12) After selling off more than a third
of its value since January 1st, the stock has reach our target
and shorts are beginning to cover. We therefore, drop the
distributor of electronic components.

MRK - $150.75 4.25 (2.00) Stock snapped back over its 50-day
moving average. We therefore, are dropping it as the drug
sectors has found renewed strength.

SPLN - $40.13 5.25 (.25) Stock snapped back during todayıs
broad relief rally. CBS corporation and Sportsline announced
today the extension of the equity-for-promotion exchange that
created CBS sportsline, the nationıs premier online media
service devoted exclusively to sports information, news and
merchandise



PICK NEWS - CALLS
*******************************************************

WMT $85.81 +4.88 (+1.56) After a couple of dismal days, it was
great to see WMT rebound when the market showed some strength.
Wal-Mart never makes the huge moves up or down that are seen 
in the internets or even in the techs. It is generally a slow 
but steady climber, so today's 5.8% jump in price is a good 
move for this stock. WMT made Fortune Magazine's top 10 list 
of America's most admired companies, which will appear in the 
March 1 issue. Fortune's business leader panel cited 
"impressive growth and killer shareholder return through the 
expert use of technology."

MDT $83.88 +2.00 (-2.87) After trending lower each day this 
week, Medtronic gapped up $1.13 at the open today and managed 
to add another $.87 late in the day for a nice even $2.00 gain. 
JP Morgan cut St. Jude Medical around noon today, saying that 
both MDT and Guidant are out-competing St Jude in the 
defibrillator market, an important area for companies in this 
business. You already know from Sunday's letter that MDT is 
now the current leader in heart rhythm management with its 
newly approved second-generation dual-chamber defibrillator. 
If the market continues up, MDT will, too.  Possible resistance 
at $89.25.

MEDI $51.13 +1.56 (-1.31) Yesterday, MEDI traded in a range 
between $48.88 and $50.50, closing almost unchanged. Today it
advanced 1.56, but on relatively light volume. When the stock 
dipped to $49 or a little lower on Tuesday and again on 
Wednesday, investors bought the dip on strong volume, 
suggesting support at that level. With a continuation of the 
market rebound we saw today, momentum should resume with MEDI 
and send the stock higher.

CLX $132.31 +3.81 (+10.06) What a run CLX has had the last 
three trading days.  We have seen a gain of over $12 over
this time frame.  We saw CLX increase when the market was
down, and increase when the market was up.  No news to 
account for this move, but we'll take it.  Those holding
open positions, make sure you use a trailing stop.  CLX will
probably take a breather in the next few days.  Wait for a 
dip to buy into new plays.

MWD $92.13 +7.44 (+3.13) We were happy to see a nice jump 
in the financials today, especially MWD.  We are near a 
prior resistance around $92.50.  MWD did close right on its
high of the day.  This is a bullish sign for the stock on
Friday.  Traders were pleased with the things Federal Reserve
Chairman Alan Greenspan had to say about the future of
further consolidation within the financial industry.  Wait 
for a dip to purchase new positions.  After a gain like today,
we are bound to see a little profit taking.

LVLT $59.69 +2.88 (+4.00) LVLT has been rising, but can't 
seem to break the $60 level.  If this resistance is broken,
we could see a good, old fashion short squeeze.  The short
interest ratio is over 5.  This means that at normal volumes,
it would take 5 trading days to cover all the shorts.  Though
earnings are next week, there is not a lot of analysts that
have made estimates on LVLT's earnings.  This stock is driven
by its future potential.  A break through $60 on strong volume
would be an ideal time to initiate new plays.

PSIX $36.25 +3.00 (-1.13) PSIX has made up most of its
losses from earlier in the week with a gain of $3.63 in the
last two trading days.  Remember, PSIX has earnings on the 
16th of this month.  The Internet Stock News website 
announced today that they have formed a Large Cap Internet 
Index.  PSIX has been added as one of the stocks listed.  
If the market continues the rise it started today, we feel 
PSIX will be a leader.    

VISX $60.81 +2.94 (+1.62) VISX has not made any substantial
moves this week, but has still trended slightly higher.  We
do not have any news to report.  There is some resistance in
the $64.00-$64.50 range.  VISX's volume has been near its
averages.  We need to see VISX make a move on strong volume
for it to break through prior resistance.



***** Play updates continued in section two *****



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*************************************************************
                      DISCLAIMER
*************************************************************
This newsletter is a publication dedicated to the education 
of options traders. The newsletter is an information service 
only. The information provided herein is not to be construed 
as an offer to buy or sell securities of any kind. The 
newsletter picks are not to be considered a recommendation 
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in 
options. It is possible at this or some subsequent date, the 
editor and staff of The Option Investor Newsletter may own, 
buy or sell securities presented. All investors should consult 
a qualified professional before trading in any security. The 
information provided has been obtained from sources deemed 
reliable but is not guaranteed as to accuracy or completeness.
The newsletter staff makes every effort to provide timely 
information to its subscribers but cannot guarantee specific 
delivery times due to factors beyond our control.

The Option Investor Newsletter         Thursday  2-11-99  
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.


PICK NEWS - CALLS (continued)
*******************************************************
DELL $101.88 +4.88 (+1.48)  Dell generated over $16.8 
billion in revenues for the past four quarters. Yesterday 
the vendor announced its single largest online sale ever. 
That deal, worth more than $7 million, is to deliver 
several thousand notebook PCs to Norwest Mortgage.  Dell 
currently has an estimated $10 million in daily Internet 
sales.  Michael Dell has stated Dell's intent to achieve 
50% Internet generated sales within 2 years.  Currently, we 
are playing Dell for an earnings and possible split play. 
Earnings are due February 16 after the close.  Today's
action in anticipation looked pretty good with 23 million
shares traded.  If the market holds, Dell could continue
the run.  Confirm market direction first. 

AOL $164.50 +13.63 (+0.50)  Wow!  What a comeback.  Trading 
as low as $142 yesterday, bottom feeders and funds could 
not refuse the huge discount.  Frankly, the Positive CNET 
news lit the fuse for all Internet stocks today, including 
AOL.  Their 2:1 split is effective February 22.  Even 
though we'd like to see these increases backed by volume, 
market willing, it looks like the split run has begun.  
$13.63 is a big 1-day profit and we encourage you to 
protect it with stop orders.  AOL, (16 million subscribers) 
the world's largest Internet service provider, Wednesday 
announced a multi-year, multi-million-dollar deal with 
Columbia House (13 million club members), that would 
promote its music, video and DVD clubs throughout AOL 
mediums.  Also, AOL filed a document today with the SEC 
outlining their plans to jointly develop new browser 
technologies with Sun Microsystems using AOL's Netscape 
division.  While not yet a threat to MSFT, it seems 
apparent that AOL will discontinue its agreement to promote 
Internet Explorer when the Agreement ends in 2001. 
"They've got a pretty good model for world domination," 
said Jim Cramer of Cramer Berkowitz.  Still an Internet.  
Confirm direction.  Use stops.

WCOM $80.44 +4.19 (+4.19)  Finally, WCOM is showing us the 
money on "penny ahead" earnings of $0.23, compared with 
$0.10 a year ago.  Data revenue jumped 29% and 
international revenue grew 55%.  Separately, MCI WorldCom 
announced it has signed an agreement with Electronic Data 
Systems (EDS), valued at about $17 billion, to exchange 
assets and employees.  The really great news:  WCOM held 
above $80 on strong volume!  Market willing, WCOM could 
take off from this level into the blue sky.  Stand aside 
before playing until you confirm market and stock direction 
with volume.

MSFT $162.75 +2.13 (+2.75)  Yesterday, MSFT traded fairly 
flat but today, made up for a bit of Tuesday's loss.  While 
any gain is good, slightly weak market-wide volume doesn't 
pump our adrenaline yet.  Considering MSFT is the largest 
weighted stock in the NASDAQ, this General's tiny footsteps 
barely participated in the 96-point NASDAQ march today.  
While in the end, the DOJ trial will have no material 
affect on earnings, we surmise MSFT's headlining blooper's 
on the witness stand cast a negative aura over what could 
otherwise be called a huge growing profit machine.  We 
still think MSFT is a great company and will perform well 
leading up to it March 22 split.  Confirm market direction 
and stock volume before jumping in.

DH $61.56 +2.81 (-0.57)  A bit more profit taking set in 
yesterday but was quickly erased with a $2.81 gain today on 
normal volume; a positive considering the lower overall 
market volumes of the last 2 days.  Retailers in general 
are reporting the existence of notable January profits, an 
unusual occurrence following strong holiday sales.  DH's 
Target division and other "return on investment"-focused 
retailers are a big beneficiaries as fund managers add them 
to the mix.  DH has only 40 million shares not 
institutionally owned available for daily trade.  When 
demand is high, the price of DH moves nicely since funds 
aren't likely to sell a winner during temporary market 
turbulence.  Look for the recovery and up-trend to 
continue.

CC $56.00 +2.38 (-6.38)  Even after Tuesday's drop, CC 
still had $1.25 to fall in yesterday's trading.  Today, 
they posted a gain of $2.38 on 31% greater than average 
volume.  CC is benefiting from reports this week outlining 
the retail sector's positive sales surprise and robust 
consumer spending.  There is no specific news on CC, though 
CC, along with Best Buy and Comp USA, is a major 
participant in the digital revolution, the Internet, 15% 
growth rates of the PC business, PCS telephony, etc.  Fund 
managers are tripping over themselves not to miss out on 
this technology distribution channel.  With only 59 million 
shares in float, extra volume ratchets the price up nicely.  
If the market behaves, we expect CC to test its higher 
levels set last week.

ORCL $59.56 +5.88 (+3.38) ORCL bounced off of its 21 day moving
average and closed above its 10 day moving average today on a
very nice move.  In the news, Salomon upgraded ORCL to a buy
and raised their 1999 earnings estimates.  At the Goldman Sachs
tech conference this week, ORCL spoke again of their vision for
the Internet as a platform for running database software such
as their Oracle8I.  

UTX $121.50 +2.50 (-3.50) UTX bounced off of its 21 day moving
average and closed right at its 10 day moving average today. 
It really spiked up at the close today.  In the news, UTX
announced its sponsorship of AmericaOne, one of the
participants in the 2000 America's Cup.  UTX's researchers and
engineers are assisting in the research and design of the
boats.

LOW $54.69 +2.19 (-.31) LOW recovered today to close just below
its 10 day moving average which is at $55.29.  It looks like it
bounced off of the support at $51 that we referred to on
Tuesday.  There hasn't been any news on LOW since Tuesday's
update.  Remember, we are playing LOW as a run into their
earnings announcement on 02/23.  

ANF $75.50 +4.13 (+1.87)  Everybody loves a rally.  Thursday,
Abercrombie and Fitch showed us its appreciation for the 
really green day on the markets by stitching together a +$4.13 
gain.  Look for it to keep recovering and head up to test its 
resistance level of $79.38 set back on 2/4/99.  Earnings for 
the company are just around the corner on Feb. 17th.  

MCD $82.00 +2.13 (+1.69)  McDonalds is turning up the heat- 
and in a big way.  On Thursday, it fried up a nice, juicy 
+$2.13 burger.  It even closed at its high for the day of 
$82.00 which also is its all time high and resistance level.  
We strongly suggest waiting for it to break and stay above 
that level before gobbling up any new plays.  It will split 
2:1 on March 5th.  In other news, McDonalds is going to delist 
from the Tokyo bourse on May 19th.  The company commented that 
the costs of being listed weren't paying off since they are 
already highly recognized throughout Japan. 

SUNW $105.31 +7.88 (+4.68)  Thank-you!  Thank-you !  Thank-you!  
The market rally on Thursday was badly needed.  It definitely 
spurred Sun's comeback of +$7.88 in one day.  It was so nice to 
see Sun turn it around.  It is now positive for the week with a 
+$4.68 gain.  Be careful with your stop losses however.  With a 
spike like this, profit taking could drop the stock back as 
easily as another turn for the worse in the markets.  In other 
news, SUNW has a much bigger role in the AOL/Netscape deal than
initially reported.  SUNW committed $1.25 billion to AOL.  
In return, the two companies will work together to develop a 
"new browser" to compete against Microsoft products along with 
new client software, network applications, and Netscape 
code-based server software.  The two will share revenues from 
any products they co-develop. 

VIA.B $82.50 +0.38 (-1.69)  Even though Viacom is still down 
for the week, it is beginning to regain lost ground.  In the 
past two trading days it has added +$1.01 after consolidating 
earlier in the week.  Viacom is beginning to look like a 
potentially solid play again.  With earnings expected on 
2/25/99, the key will be to see if VIA.B can break and hold 
above its resistance residing at the $85.50 level.  The push 
might come from the numerous Academy Award nominations that 
the movie "Saving Private Ryan" received.  Viacom owns 
Paramount Pictures and the Academy Award honors mean 
increased business and $$ for all involved. 

WAG $61.50 +2.31 (+0.81)  Walgreen's has made a substantial 
turn around in the past two trading days.  It struggled 
earlier in the week because of a weakened market.  But the 
rally on Thursday propelled it higher along with anticipation 
of its 2:1 stock split tomorrow (Friday Feb. 12,1999).  
Remember that we don't recommend holding over the actual 
split.  You can always play it again once it begins another 
uptrend after it splits.


PICK NEWS - PUTS
*******************************************************
ADBE - $45.06 .63 (-.44) Stock rallied just couple of point 
during the strong tech rally. Stock still below key support
level at 50-day moving average. Look for continued sell-off
if broad market current rally fails. Canadian software
creator Corel Corp denied rampant reports Wednesday that its
was in merger talks with Adobe Systems, the largest maker of
digital publishing software.

BMCS - $46.75 2.75 Stock consolidating within tight range
between $44-48. Stock still under pressure.

AXP - $101.00 4.25 (3.00) Stock snapped up above its 50-day 
moving average following the strong broad market rally over
the past two days. Overhead resistance between $100-105. 
Therefore stock could still fail given the Banking index is
trading below its 50-day moving average.

BAC - $64.94 3.31 (5.19) Stock rallied back above its 50-day 
moving average following strong broad market rally. 

BDX - $35.06 1.06 (-.69) Stock moved up following today broad 
market rally but still trading below declining moving averages
and at key break-down price of $35. BDX announce this week
the acquisition of Biometric Imaging (BMI), a privately-held
company serving the transfusion medicine. 

BKB - $37.06 1.63 (-2.06) Stock traded higher today along with
the broad rally within the financial sector. Although the
stock is still trading below its 50-day moving average it is
trading above a support point and level of $35.

ERTS - $41.06 2.19 (.81) Stock rallied above $40 during broad
market rally. Company announce the shipment of Sid Meierıs
Alpha Centauri.- the next generation in straegy games from
the design team that developed the top selling and critically
acclained Sid Meierıs Civilization I & II. 

MCHP - $30.50 .50 (-.32) Stock traded up fractionally despite
string tech rally. Stock trading just above near-term
support of $30.

PG - $88.44 .44 (3.19) Stock showed strength along with broad
market rally. Stock trading below 50-day moving average but
above near-term support of $85. PG will begin advertising of
Tide with bleach that now sanitizes laundry.

PHSYB - $66.38 .38 (-3.12) Stock breaking down despite broad
market rally the past couple of days. Next support level
near $60.

WLA - $68.94 56 (1.00) stock up fractionally despite broad
market rally and drug sector strength. Still trading below
declining 50-day moving average.





NEW CALL PLAYS 
******************

EGRP - E*Trade Group, Inc. $48.25 +5.50 (-.69 for the week)

EGRP is the #3 online brokerage firm with almost 550,000
accounts.  EGRP also offers market data, cash and portfolio
management services, and options trading.  About 30% of sales
come from sales of advertising on its Web site, international
ventures, subscriptions, and other services.  Through joint
ventures the company also operates in such countries as Canada,
France, Germany, Japan, the Netherlands, and Poland.  SOFTBANK,
its joint venture partner in E*TRADE Japan, owns 28% of the
company. 

EGRP has been making quite a bit of news lately with their well
publicized system outages.  In fact, they have gotten hit with
a couple of lawsuits and an investigation by the New York
Attorney General in connection with the outages.  However, this
remains a case where the bigger success you are the larger the
target you become.  E*trade was up over 90% for its troubled 
week, yet no one heard about Suretrade only being up 73% for the
week.  In a more positive light, EGRP has just completed its 
initial investment in E*Offering, a full service investment 
bank on the Internet.  E*Offering will underwrite IPO's via 
the Internet which is in contrast to the traditional 
investment bank.  

EGRP has been hit hard by selling in the last week with the
news of the system outages.  We are adding EGRP to the play
list because it appears as though the selling might be over. 
EGRP bounced yesterday off of $35 yesterday, which looks like
support, and closed above its 21 day moving average today.  It
is always dangerous to try and pick a bottom, but the online
brokerage group has some tremendous momentum behind it. 
Trading volumes surged 34% during the fourth quarter of 1998
and are reported to be up 25-50% during January.  EGRP is a
volatile stock, so you should make sure it fits your risk
profile before trading it.  

BUY CALL MAR-50 QGR-CJ OI= 999 at $ 7.25 SL=5.50
BUY CALL MAR-55*QGR-CK OI=1010 at $ 5.38 SL=3.50
BUY CALL APR-55 QGR-DK OI=1027 at $ 8.00 SL=6.25
BUY CALL APR-60 QGR-DL OI= 759 at $ 6.38 SL=4.50
BUY CALL JUL-60 QGR-GL OI= 442 at $11.50 SL=9.00

Picked on Feb 11th at $48.25   PE=n/a
Change since picked    +0.00   52 week low =$ 5.00
Analysts Ratings   2-4-4-0-0   52 week high=$66.44
Last earnings 12-98 est=-.14   actual=-.12
Next earnings 04-14 est=-.18   versus= .08
Average Daily Volume = 6.4 mln
Chart = http://quote.yahoo.com/q?s=EGRP&d=3m

******

GTW - Gateway, Inc. $76.00 +1.38 (+2.00 for the week)

Gateway (formerly Gateway 2000) is the #2 direct marketer 
of PCs in the US behind global leader Dell.  The company 
provides products directly to computer users ordering by 
phone or Web site instead of through resellers, cutting 
markup costs and releasing new technology faster.  The 
company makes both desktop and portable PCs, PCTVs, and 
NetPCs (cheap, stripped-down computers designed to be 
attached to networks).  Gateway also sells component add-ons 
such as CD-ROMs and offers Internet access (gateway.net). 
More than a third of its products are sold to consumers. 
Chairman and founder Ted Waitt and his brother Norm own 44% 
and 8% of Gateway, respectively.

GTW has had two positive days in a row.  On Wednesday, GTW
advanced $3.00 mainly on positive comments by its CEO at
the Goldman Sachs Technology Conference.  He stated he feels
good about the earnings forecasted for the 1st quarter.  GTW
sees projected growth at 2 times the industry average of about
15-20%.  GTW closed above its 10-dma today and closed just off
its high of the day.  

There was an interesting article on Stock Brief today talking
about how Mr. Miller, a portfolio manager, values stocks.  He 
uses a formula, which basically figures the future cash flows based
on projected growth rates, and then figures a present value. 
Though a complex formula, Mr. Miller shows Dell having a fair value
of $104, AOL of $135, but has GTW with a valuation of $200.  This
doesn't mean we will see GTW at $200 anytime soon, but it is an
interesting thought.  GTW just doesn't have the appeal a stock 
like AOL or DELL has.  

BUY CALL MAR-75 GTW-CO OI=579 at $ 7.00 SL=5.25
BUY CALL MAR-80*GTW-CP OI=586 at $ 4.38 SL=2.75
BUY CALL JUN-75 GTW-FO OI=237 at $12.25 SL=9.50
BUY CALL JUN-80 GTW-FP OI=403 at $ 9.88 SL=7.50
BUY CALL SEP-85 GTW-IQ OI= 23 at $11.38 SL=9.00

Picked on Feb.12th at  $76.00   PE = 27
Change since picked   +$ 0.00   52 week high=80.44
Analysts Ratings   10-6-6-0-0   52 week low =36.13
Last Earnings   01/99 est .78   actual .81 
Next Earnings   04/21 est .60   versus .48
Average daily volume = 2.04 mln.
Chart = http://quote.yahoo.com/q?s=GTW&d=3m

******

COMS- 3Com Corp $33.81 +3.25 (-0.38 for this week)(-12.81)

3Com Corporation is the ranked #2 in the world as a maker of 
computer networking products.  Cisco is currently holding the 
number one spot. Its name "3Com" stands for the three "coms":  
computer, communication, and connectivity.  The company has 
offices in 45 countries with over half of its sales coming from 
outside the US.  It is a broad-based provider of local area 
network (LAN) and wide area network (WAN) systems for large 
and small business, home, and service provider markets.

We are initiating COMS as a play in the "dead cat bounce" 
category.  The stock has been beaten down so far in recent 
trading that we think the possibilities of a bounce back up 
look good.  Add that to the rumors floating around that Intel 
is very interested in purchasing this company and all of a 
sudden you have a pretty attractive looking play.  The 
buy-out could possibly come as soon as this weekend.  
Speculation and then realization of that speculation can 
cause a stock to rocket.  But, this is a very risky play.  
If you don't have $$ to gamble, you might want to pass 
on this one. 

News:  A little over a week and a half ago, 3Com dropped 
almost $17 on concerns that there would be a potential 
slowdown in sales of networking equipment.  DLJ and 
Prudential both downgraded the company and cut their estimates.  
Needham objected and reiterated a strong buy.  More recently, 
there have been several positive press releases on the company.

BUY CALL MAR-30.00 THQ-CF OI= 507 at $5.63 SL=3.75
BUY CALL MAR-32.50 THQ-CZ OI= 402 at $4.00 SL=2.50
BUY CALL MAR-35.00 THQ-CG OI=2345 at $2.63 SL=1.25
BUY CALL APR-30.00 THQ-DF OI=1271 at $6.50 SL=4.75
BUY CALL APR-32.50 THQ-DZ OI=1506 at $4.88 SL=3.25
BUY CALL APR-35.00*THQ-DG OI=5301 at $3.63 SL=1.75

Dead Cat Bounce/Take Over play

Average Daily Volume = 7.1 mln

Chart = http://quote.yahoo.com/q?s=COMS&d=3m



NEW PUT PLAYS 
******************

NONE


*****************************************************
COMBINATION PLAYS   
*****************************************************
Bargain hunters out in force...

Stocks ended mixed Wednesday as investors shifted to the big-name
companies and avoided the high-flying Internet sector. The DJIA
ended up 44 points at 9,177.31, bouncing back from Tuesday's 158
point slump. Nasdaq stocks stayed weak with shares of Lycos Inc.
slumping further a day after its acquisition of USAI contributed
to the third-largest point decline ever for the index. The Nasdaq
eased slighlty to 2,309.51, on volume of nearly 920 million and
sixty-five stocks fell to new 52-week lows, while only 17 reached
new highs. In the broader market, declining issues beat advances
18 to 11 on active volume of 721 million shares on the NYSE.

Tuesday's new positions:

AMP	MAR45C/50C	   $3.75  Debit (Much higher on the long side!)
AMR	FEB60P/55P	   $3.50  Debit (Watch closely for settlement)
ONE	FEB50P/47P	   $1.25  Debit (slightly better than expected)
USAI 	MAR40C/FEB40C  $1.75  Debit (Off to a good start!)
 

Thursday, February 11

U.S. stocks soared as bargain-hungry investors came back to the
market after a two day sell-off. Fed chairman Greenspan spoke on
banking issues but didn't mention any monetary policy giving all
investors some short-term relief. The DJIA closed up 186 points
and moved back into positive territory for year. The Nasdaq ended
95 points higher at 2405.49 in the biggest gain ever. Technology
stocks and financial services issues posted the largest gains and
NYSE breadth was positive for the first time in six sessions.

In our portfolio plays:

American Airlines on Wednesday won a court order forcing pilots
back to work, ending a work slowdown that threatened to snarl
vacation travel over the long President's Day weekend. District
Court Judge Joe Kendall issued a temporary restraining order
against American's 9,200 pilots after hearing attorneys for both
the airline and the Allied Pilots Association for four hours. The
play became somewhat suspect at that point but Thursdays prices
allowed an exit at break-even; $3.50 (if you chose to take it). If
you stay in, watch this one closely.

One of our speculation/disparity plays with an open short position
rallied to safety today. Insurance giant AIG rose climbed over $7
after reporting a 13% surge in fourth-quarter earnings and said
prices in parts of the long-battered U.S. commercial insurance
market may be stabilizing.

ONE was another bearish play and with the short time frame and
today's new group strength, we exited quickly to minimize losses.
All of the tech stocks rallied, including some recent slumping
issues; IBM, INTC, XRX, & ITWO. Many of the smaller stocks also
rebounded, one of those offering an exit included OXHP; FEB17C/20C.
******************************************************************
				- NEW PLAYS -
******************************************************************
EGRP - E*trade Group  $48.25     *** Volatility Play ***

E*TRADE Group is the #3 online brokerage firm and the company lets
its half-million account holders trade stock online. The Internet
is about 80% of their trading volume. E*TRADE also offers market
data, cash and portfolio management services, and options trading.
About 30% of sales come from sales of advertising on its Web site,
international ventures, subscriptions, and other services.

E*TRADE also announced today the company has completed its initial
investment in E*OFFERING, a new full-service investment bank on
the Internet. The new venture is moving closer to implementation
by accelerating its development of a state-of-the-art Web site that
will enable visitors to research information on subscribed public
offerings to be underwritten by E*OFFERING. In addition, they have
instituted an aggressive recruitment plan to identify and hire new
talented employees to staff all divisions of the company.

We believe this stock will eventually move higher, but incredible
volatility and the small premium differences in each strike allow
us to profit both ways. Play this just like a straddle and keep in
mind that although one position can pay for both, small profits are
always the goal.

PLAY (conservative/neutral):

BUY  CALL MAR-60 QGR-CL OI=940 A=$4.00
SELL CALL MAR-65 QGR-CM OI=805 B=$2.62
OPENING NET DEBIT TARGET=1.25 ROI(max)=300%

BUY  PUT MAR-40 QGR-OH OI=74  A=$3.62
SELL PUT MAR-35 QGO-OG OI=423 B=$2.00
OPENING NET DEBIT TARGET=$1.50 ROI(max)=230%

Chart = http://quote.yahoo.com/q?s=EGRP&d=3m
******************************************************************
LSI - LSI Logic  $27.06     *** Technicals Only ***

LSI Logic is the "system-on-a-chip" company. They design and make
application-specific integrated circuits. Their chips combine the
microprocessor and memory functions of an electronic system onto
a single chip. The heart of LSI's design process is CoreWare, the
company's extensive library of industry-standard building blocks.

LSI Logic Chief Executive Wilfred Corrigan said the Internet has
replaced the personal computer as the primary driver of business
and new demand is coming from the growing need for a sophisticated
infrastructure to support it. Corrigan also said a recovery in the
chip industry is beginning and demand is picking up in Asia. He
sees $30 million in revenue from China in 1999, jumping to as much
as $100 million in 2000. Total sales for LSI Logic are expected to
be above $2 billion in 1999.

You should expect to trade out of this position if it doesn't make
a significant move by next month. The stock is very volatile and
the new open interest after the February strike will keep the
options values at a premium when you exit each position.

PLAY (conservative/debit-strangle):

BUY CALL APR-30 LSI-DF OI=1370 A=$1.75
BUY PUT  APR-25 LSI-PE OI=1041 A=$1.75
INITIAL NET DEBIT TARGET=$3.25 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=LSI&d=3m
******************************************************************
HNZ - H.J. Heinz  $54.56     * Merger/Restructuring Speculation *

Heinz is one of the leading food producers in the world with more
than 5000 products, emphasizing ketchup, food service, and other
products like convenience foods, and weight-control programs. Its
well-known US retail market leaders include Heinz ketchup, Ore-Ida
frozen potatoes, Star-Kist tuna, 9-Lives cat food, and Weight
Watchers. It's also the #1 maker of private-label soup. Heinz gets
about half its revenues from foreign operations, and the company
is emphasizing its expansion in developing markets where ketchup
and other processed foods aren't standard dinner fare.

Implied volatility on Heinz options jumped this week amid strong
demand for the call options. Traders were at a loss to explain the
activity in the options and in the stock, but most agree it looks
like something is going on. There is new interest in the calls all
the way out to September and traders are paying a premium. There
is virtually no interest in the puts and most of the activity was
from institutional customers. The options market is telling us to
be prepared for a upward move in the stock. We are going to bet
that it doesn't occur until after next week and will plan to sell
the March call on the Monday after the February strike date for
its remaining time value.

PLAY (speculative/time spread):

BUY  CALL MAR-55 HNZ-CK OI=2148 A=$3.12
SELL CALL FEB-55 HNZ-BK OI=955  B=$1.25
INITIAL NET DEBIT TARGET=$1.75 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=HNZ&d=3m
******************************************************************
TXN - Texas Instruments  $95.06     *** Rally Today ***

Chip maker Texas Instruments leads the digital signal processor
market with a 45% share. DSPs convert signals such as sound and
light into digital signals. They are used in various programmable
products, such as VCRs and camcorders, automobiles, computers and
cellular phones. TI continues to pioneer new technologies: Its
digital light processor technology uses tiny mirrors to create an
ultrasharp display for TVs and home computers. In order to focus
on its DSP business, TI has sold its defense electronics/memory
chip businesses.

Semiconductor shares led the hardware sector higher Thursday on
the strength of Prudential analyst Ali Far's positive new coverage
on several other chip makers. Far said in a research note that he
expects to see an "acceleration" of business fundamentals in the
semiconductor industry during the second half of this year. This
caused a significant rally in the group but we think TXN is very
toppy, somewhat over-extended and will fall short of $100 during
the next week.

Play this initially on upward momentum by opening the long call
first. If it continues moving higher, sell it for a small profit.
When the stock price fades, sell the short position to create the
credit spread.

PLAY (aggressive/credit spread):

BUY  CALL FEB-105 TXN-BA OI=2191 A=$0.62
SELL CALL FEB-100 TXN-BT OI=4482 B=$1.12
INITIAL NET CREDIT TARGET=$0.62 ROI=14%

Chart = http://quote.yahoo.com/q?s=TXN&d=3m
******************************************************************


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                      DISCLAIMER
*************************************************************
This newsletter is a publication dedicated to the education 
of options traders. The newsletter is an information service 
only. The information provided herein is not to be construed 
as an offer to buy or sell securities of any kind. The 
newsletter picks are not to be considered a recommendation 
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in 
options. It is possible at this or some subsequent date, the 
editor and staff of The Option Investor Newsletter may own, 
buy or sell securities presented. All investors should consult 
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information provided has been obtained from sources deemed 
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