Option Investor
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Daily Newsletter, Saturday, 04/10/1999

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The Option Investor Newsletter            Sunday  4-11-99  1 of 6
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

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

Published three times weekly, Sunday, Tuesday, Thursday evenings.
New plays and market wrap updated daily on the website. 
******************************************************************
Entire newsletter best viewed in COURIER 10 font for alignment
******************************************************************
MARKET STATS FOR LAST WEEK AND PRIOR WEEKS
******************************************************************
        WE 4-9            WE 4-2           WE 3-26         WE 3-19
DOW    10173.84 +341.33  9832.51 + 10.27  9822.24 - 81.31  + 27.20  
Nasdaq  2593.05 + 99.68  2493.37 + 74.20  2419.17 -  2.10  + 39.74  
S&P-100  681.34 + 31.42   649.92 +  6.24   643.68 -  6.43  +  1.84  
S&P-500 1348.35 + 54.63  1293.72 + 10.92  1282.80 - 16.49  +  4.70  
RUT      405.86 +  7.12   398.74 +  4.82   393.92 -  2.66  -  1.80  
TRAN    3370.40 + 61.24  3309.16 + 49.05  3260.11 - 78.37  + 70.97  
VIX       22.91            23.34            25.83            25.84
Put/Call    .54              .62              .50              .53
******************************************************************

Russia was rumored to be going nuclear but Compaq actually did it!

The bomb dropped Friday after the close and the collateral damage
may be extensive. Compaq had been rumored to be in trouble for some
time but the warning period had safely passed, or so analysts thought.

After the bell on Friday Compaq warned that earnings would not just
miss the $.31 that analysts were expecting but would miss it by a
wide margin. According to Compaq they will only post earnings in the
$.15 range, less than half of the previously reduced estimates. This
is a major blow. The reasons given were lower demand, aggressive
pricing by the competition, bad product mix and a slow down of Y2K
related sales. In actuality, everything that could go wrong, did!
This could be the death knell for the booming tech sector. In after
hours trading on Friday CPQ was down -$4.00 but the real damage was
in the other tech leaders. Intel -4.50, MSFT -2.50, DELL -3.25, GTW
-2.00. The reasoning was that weak sales for the giant meant weak 
sales for the supporting cast. 

Another nail in the tech coffin was a report in IBD today that MSFT
European president, Michael Lacombe, was quoted in Reuters as that
sales of personal computers could grind to a halt in the coming 
months. Microsoft said large corporations are winding down purchases
of PC's and software to replace old ones with the Y2K bug. He did
not expect small to midsize companies to pick up the slack until
their computers failed with Y2K. Michael was only talking about
the European community but you can bet the comments will be taken
to heart here as well.

This one, two punch could cause real havoc on Monday as tech investors
rush to take sizeable profits from the last several weeks. This would
be a real shame after the Russell-2000 jumped so strongly above 400
on Friday. The small cap confirmation of the big cap move was just
catching fire. In a complete turnabout the RUT was up almost +6 points
on Friday when the Dow was negative. The advance/decline line was also
strongly positive. The transports were also up, even in the face of
a surge in oil prices again. All the factors were lining up in our
favor and gaining speed. It is entirely possible the wild bull express
could be derailed by something NATO bombs could not deter, a tech
warning.

I wrote about this possibility several times recently. The positive
surprises had given investors hope that the rally was for real and
the only thing that could take the bloom off the rose was a tech
warning by a big name. Intel had been a worry but their time passed
without so much as a whimper. Dell held an analyst conference last
week and said 35-40% growth, no problem. So far so good. The only
two left were CPQ whose time had also passed and HWP who never made
estimates anyway. Now we are faced with the age old problem of roaches.
If you see one you can bet there are more just out of sight. Once the
warnings start and the lead company takes it on the chin, the others
try to jump in quick in hopes to avoid being singled out for punishment
later.

The only hope I see is that investors see this for what it is, a 
warning from a company that has found it impossible to compete in the
modern Internet world. A company that is too slow to innovate, produce
and change with the times. Dell is the shining example of the new
paradigm. They continue to innovate, slim down, pare prices, make
deals to keep themselves in the race. Compaq has tried for some time
now to copy the Dell model but has not been able to execute quickly
or correctly. Why has Compaq's stock price been mired in the mid $30
range for what seems like forever and Dell's stock doubles every year?
It is execution, pure and simple. Compaq has failed over and over to
use it's larger capabilities to better it's business model and in the
meantime the smaller, faster Dell has now overtaken the giant and will
soon pass it. Hopefully investors will quickly see through the smoke
and continue to invest in tech stocks that win and not punish the 
winners for the losers faults.

Better news on Friday was the Producer Price Index numbers that came
in at only +0.2%. The majority of the increase was energy related and
showed again that there is no inflation on the horizon. The Nasdaq and
the S&P-500 set records again with the Nasdaq adding almost +100 for
the week. 

The coming week is littered with a minefield of economic reports.
Almost every day is a potentially deadly event. However there is no
reason to expect the reports to be worse than the recent string of
positive results. The economy is doing great and the world economy
is recovering. Unless we get some blockbuster news that is totally
unexpected then the reports should continue to shore up the existing
rally. Positive reports could bring investor focus back from Compaq
to the overall market.

Monday will be the key. If the broader market turns over because of
tech earnings fears brought on by Compaq then we could see a possibly
significant downside. Some analysts are talking about 9,000 again !
I would rather look for the bright side. I would hope that Compaq
would be the only stock punished and then quickly fade out of sight.
Any dip we get on Monday morning could be a buying opportunity. The
key will be picking the bottom of the dip based on the severity of 
the sell off. I urge you to not be eager to jump in at the first
sign of a bottom unless you can be just as quick in jumping out if
the "bottom" was simply a brief rest on the way down. The market
has had a great run the last week or so and is due to sell off on
simple profit taking anyway. Lets hope the added spark of the CPQ
warning just makes it sharper and brief. I hate it when it just
drags down -30 to -40 points for days before finally turning up
again. I will take a quick drop and rapid rebound any time. A
word of warning, many stocks have added +$10, $20, $30 in the last
two weeks. They can give it back faster than they added it in a
selling panic. Protect yourself. Tighten your stops. Get out with
a profit. Don't be in a hurry to get back in....

Good Luck

Jim Brown
Editor



*****************************************************
JIM'S PLAYS		 
*****************************************************

Last Sunday I had two open positions. The OEX Puts
and EMC calls. I had been reluctant to sell the OEX Puts
on the previous Thursday at $6.50 with the non-farm
payrolls due out on Friday with the market closed. 
You all know what happened. The jobs report was very
market friendly and the market gapped up strongly at
the open on Monday and never looked back. That position
bit me but fortunately it was not a large position. I
never play large OEX positions since the market turns 
on a dime quite often and does not give change.

The EMC position turned profitable and after a brief
pullback on Tuesday just kept going. I dutifully sold
for a +40% profit and then watched it go on up. 

This was a great week for trading. I would have preferred
for Monday not to have gapped open but we have to play the 
cards we are dealt.

My naked puts did very well and I was able to double
up on the next strikes as NDB and EGRP continued to rise.
I should have closed them on Friday for significant gains
but with the market in full rally mode I felt sure they
would expire worthless. Since no one can tell the future,
as evidenced by the Compaq warning, you should always 
take your profits to avoid further risk. I will close
on Monday for probably higher numbers than I could have
gotten on Friday. Murphy's law is alive and well.
All the calls I bought on Tue were closed out for a
profit. By taking a small profit and not getting greedy
I avoided the Compaq disaster on Monday entirely by 
accident. I like to think of it as just another profitable
series of plays by adhering to the plan. The more you try
to squeeze out of a play the more likely you are to get
bit. The disaster on Monday could have had many names,
Compaq was just the name to blame this time. Take a small
profit and do it over and over and over.

Naked puts sold:

Mon NDB   APR-25 @ $1.00 now .25   profit 75%
Tue NDB   APR-30 @ $1.25 now .38   profit 70%
Mon EGRP  APR-65 @ $3.50 now .38   profit 89%
Tue EGRP  APR-75 @ $4.50 now .69   profit 86%

Calls bought:

Tue UNPH  APR-120 UQD-DD @ $ 8.50 sold $10.50 profit 24%
Tue AEOS  APR-70  AQU-DN @ $ 7.13 sold $ 9.50 profit 33%
Tue EGRP  APR-65  QGR-DM @ $12.25 sold $18.00 profit 47%
Tue COF   APR-150 COF-DJ @ $ 7.00 sold $ 9.25 profit 32%

Puts bought:

Tue COMS  APR-22.50 THQ-PX @ $1.13 sold $2.00 loss  56%

Previous positions closed:

APR-OEX-640 PUTS  OEY-PH @10.63 sold @ 3.50 loss   67% 
APR-EMC-130 CALLS EMB-DF @ 4.63 sold @ 6.50 profit 40%

 
The only positions still open are the naked puts.







*********************************************************
Market Sentiment - By Pinnacle Capital Advisors
*********************************************************

All Aboard

If Friday's action within the transportation and the small-cap 
sectors is any indication for things to come, then it's time to
get on board.  Notwithstanding the continental divide between
the DOW and the advance-decline line, there are some very
favorable developments within the broad market.  Specifically,
the small cap (Russell 2000) jumped more than 1.5% and closed
firmly above its 100/200 day moving average.  What's more, the
400 benchmark, which has served as resistance for the past
couple of months may now serve as support.  This could begin to
fuel interest in the small cap and further support a broad 
market breakout.

Next, if you are a DOW theorist, the Transportation Index (TRX)
is challenging new highs and despite the jump in crude oil
prices, the Airline sector moved up strongly on Friday (4/9).

These developments, together with the drop in the 30-year 
treasury notes which began last week, could very well give us the
recipe for a continued rally.  The only thing that could throw
water on the party is excessive optimism among option speculators



BULLISH Signs:

Russell 2000              Trading below key 400 level.  Troops
                          beginning to follow Generals.

Interest Rates            Trading BELOW 200dma and 5.50%
                          Benchmark. (5.452%)

Higher Highs              Several industry sectors advancing 
                          higher and took out prior
                          highs including Drug and Healthcare. 

Peak Open Interest        April's peak open interest (1.51)
                          climbed higher indicating that Put open
                          is building.

Market Volatility (VIX)   Trading BELOW 50-day moving average
                          (22.91).



BEARISH Signs:



Pinnacle Index            Reaching extreme levels at overhead 
                          strikes (OEX 680-695).


 
Advance/Decline Line      Enormous gap between INDU and A/D line. 




OTM Call Analysis As we move through April's expiration cycle, Pinnacle is tracking the level of call buying (OTM) between 650-700 among option speculators. As we have been documenting, out-of-the-money (OTM) call buying has been climbing and may serve as overhead resistance. March Expiration Cycle OEX OTM Call Analysis (Open Interest MAR 650-700) ----------------------------------------------------------------- Date Open Interest Change % Alert ----------------------------------------------------------------- Friday, March 5 58,085 - Friday, March 12 68,675 +18.2% Thursday, March 18 85,124 +47.6% * April Expiration Cycle OEX OTM Call Analysis (Open Interest Apr 650-700) ----------------------------------------------------------------- Date Open Interest Change % Alert ----------------------------------------------------------------- Friday, March 19 35,626 - Friday, March 26 60,266 +69.2% Friday, April 2 70,952 +99.2% Friday, April 9 74,028 +107.8% * Market Sentiment at a Glance ******************************************************************** Friday Tues Thurs Indicator (4/9) (4/13) (4/15) Alert ******************************************************************** Pinnacle Index (OEX): ----------------------------------------------------------------- Overhead Resistance (680-695) 8.7 * Underlying Support (645-660) 1.9 Put/Call Ratios: ----------------------------------------------------------------- CBOE Total P/C Ratio .5 CBOE Equity P/C Ratio .4 OEX P/C Ratio 1.7 Peak Open Interest (OEX): ----------------------------------------------------------------- Puts 520 Calls 700 P/C Ratio 1.56 Market Volatility Index (VIX): ----------------------------------------------------------------- CBOE VIX 23.44 Investors Intelligence: ----------------------------------------------------------------- Bullish 56.4% * Bearish 31.6% * 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 (4/9) (4/13) (4/15) ----------------------------------------------------------------- (690-695) 20.0 (680-685) 4.9 Overhead Resistance (660-675) 8.7 OEX Close 679.49 Underlying Support (645-660) 1.9 (655-660) 1.6 (645-650) 2.3 Average ratings: Resistance levels 2.0 / Support .5 What the Pinnacle Index is telling us: Overhead sentiment resistance is heavy at the OEX 680/695 level while the underlying support is moderate at the OEX 645/660 level. Put/Call Ratio ----------------------------------------------------------------- Friday Tues Thurs Strike/Contracts (4/9) (4/13) (4/15) ----------------------------------------------------------------- CBOE Total P/C Ratio .50 CBOE Equity P/C Ratio .38 OEX P/C Ratio 1.68 Peak Open Interest (OEX) ----------------------------------------------------------------- Friday Tues Thurs Strike/Contracts (4/9) (4/13) (4/15) ----------------------------------------------------------------- Puts 520 / 16,370 Calls 700 / 10,818 Put/Call Ratio 1.51 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 March 4, 1999 Bottom 28.15 April 9, 1999 22.91
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 ----------------------------------------------------------------- January 6, 1999 58.3 30.0 January 13, 1999 60.0 30.0 January 20, 1999 61.7 25.9 January 27, 1999 60.7 28.2 February 3, 1999 60.0 26.7 February 10, 1999 61.7 25.9 February 17, 1999 55.7 28.7 February 24, 1999 54.1 31.5 March 3, 1999 50.9 32.1 March 10, 1999 49.1 32.5 March 17, 1999 52.6 17.6 March 24, 1999 55.9 29.7 March 31, 1999 55.6 31.6 April 7, 1999 56.4 31.6 * ********************************************************* Market Posture ********************************************************* As of Market Close - Friday, April 9, 1999 Key Benchmarks Broad Market Bearish/Bullish Last Posture/Since Alert **************************************************************** DOW Industrials 9,750 10,000 10,174 BULLISH 4.7 SPX S&P 500 1,250 1,325 1,348 BULLISH 4.7 OEX S&P 100 630 660 681 BULLISH 4.6 RUT Russell 2000 390 400 406 BULLISH 4.9 * NDX NASD 100 2,075 2,100 2,232 BULLISH 3.29 MSH High Tech 975 1,000 1,099 BULLISH 3.29 Key Benchmarks Technology Bearish/Bullish Last Posture/Since Alert **************************************************************** XCI Hardware 875 900 939 BULLISH 4.6 CWX Software 600 650 640 Neutral 4.6 SOX Semiconductor 375 400 410 BULLISH 4.6 NWX Networking 420 450 487 BULLISH 4.1 INX Internet 550 580 664 BULLISH 3.29 Key Benchmarks Financial Bearish/Bullish Last Posture/Since Alert **************************************************************** BIX Banking 675 710 706 Neutral 3.19 XBD Brokerage 400 415 472 BULLISH 4.6 IUX Insurance 625 655 639 Neutral 3.19 Key Benchmarks Other Bearish/Bullish Last Posture/Since Alert **************************************************************** RLX Retail 900 940 958 BULLISH 4.8 DRG Drug 390 410 419 BULLISH 4.9 * HCX Healthcare 775 835 837 BULLISH 4.9 * XAL Airline 170 185 179 Neutral 3.30 OIX Oil & Gas 250 260 271 BULLISH 3.30 Posture Alert Transportation, small cap (Russell 2000) and Drug sectors all powered ahead and appear to be confirming the market breakout. As such, we have turned Bullish on the Russell 2000 after the index closed firmly above the key 400 benchmark and above its 200 day moving average. We have also turned Bullish across the Pharmaceutical and Healthcare sectors after hitting new 52-week highs. A detailed description of our Market Posture and its applications can be found at: www.OptionInvestor.com/marketposture ***************************************************** Coming Events ***************************************************** Monday: Chicago Fed Index Feb Forecast: -- Previous: 129.6 Tuesday: Consumer Price Idx Mar Forecast: 0.3% Previous: 0.1% LJR Redbook 4/10 Forecast: -- Previous: 0.6% API Oil Stocks 4/9 Forecast: -- Previous: -80K Retail Sales Mar Forecast: 0.4% Previous: 0.9% Atlanta Fed Idx Mar Forecast: -- Previous: 12.7 Richmond Fed Svry Mar Forecast: -- Previous: 7 Real Earnings Mar Forecast: -- Previous: 0.7% Wednesday: Business Inventory Feb Forecast: unch Previous: 0.1% Thursday: Jobless Claims 4/10 Forecast: -- Previous: 299k Phil Fed Survey Apr Forecast: -- Previous: 10.4 Money Supply(M2) 4/5 Forecast: -- Previous: $8.8B Friday: Housing Starts Mar Forecast: 1.75M Previous: 1.80M Housing Permits Mar Forecast: 1.72M Previous: 1.74M Industrial Product Mar Forecast: 0.3% Previous: 0.2% Capacity Utilization Mar Forecast: 80.3% Previous: 80.3% Univ Mich Sentiment Apr Forecast: -- Previous: 105.7 ***************************************************** REAL-TIME Stock an Option Quotes ***************************************************** We are constantly asked for our recommendations for a real time quote service for stocks/options/futures/indexes etc. We have reviewed many and give our strongest recommendation to Interquote. Their quotes are delivered in a fully customizable spreadsheet format with over 20 different data fields available. They offer tick by tick realtime, CONTINUOUSLY UPDATING, or delayed quotes for all exchanges. If you are considering the volatile world of option trading you will find realtime option quotes from Interquote a valuable resource. You can get a free trial from Interquote at this address. http://www.interquote.com/ ***************************************************** HOW TO SUBSCRIBE ***************************************************** We would like to have you as a subscriber. You may subscribe at any time but your subscription will not start until your free trial is over. The monthly subscription price is $39.95 The quarterly price is $99.95 which is $20 off the monthly rate. ************************************************************ To subscribe you may go to our website at www.OptionInvestor.com and click on "subscribe" to use our secure credit card server. You may also call us at 303-797-0200 and give us the information over the phone. You may also fax the information to: 303-797-1333 ***************************************************** 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              4-11-99
Sunday                   2  of  6


************
OPTIONS 101
************

Any car racing fans out there?  Stock Car Race fans?  
Drag Race fans?

I like to think of Stock trading like Stock Car Racing. 
(Convenient?)  Your car races the track at a constant 
100 mph. (Delta of 1.00)  As long as you don't spin out 
and hit the wall, (drop in price) or take too many pit 
stops (stagnant price movement), you will win your race 
and claim the prize of profits in your account.

I like to compare option trading to Drag Racing.  You buy 
at a point, desiring your option to slingshot in speed to 
a much higher price.  The quicker the better.

With Stock Racing you have time on your side, a 500 mile 
course gives you opportunities to get back on top.  Time 
is also on the side of stock traders.  Stock prices can 
rise sooner or later.  Sooner being better.  Timing is 
much more important to the option trader.  In Drag Racing, 
if you jump the gun they don't restart the race, you're red 
flagged, you lose.  With option trading you need to be not 
only right, but right on time.

With Drag Racing and option trading you want to be lined up 
from the start because there is less room for mistakes.

To win a Stock Car Race you need sustained speed over a long
distance.  Winning a Drag Race isn't based on speed, but 
acceleration.  The fastest car doesn't win, the quickest does.

Option trading, like Drag Racing is based on acceleration.

Back to Option Pricing:

Delta measures the change of an option relative to the change
of the underlying.  Delta is quoted like a snapshot in time, 
however, it is dynamic.  Delta changes, it responds to the 
passage of time and to the movement of the underlying asset.  
The change of Delta is measured by Gamma.

Beginner option traders have probably never heard of Gamma.  
Novice traders might be aware of the term, but don't understand
Gamma's significance.  Professional option traders and Market 
Makers understand and trade Gamma.  To a hedge trader, those 
with large multiple positions, Gamma is the most important 
component of option pricing.

Knowledge of certain concepts is necessary before attempting 
to understand Gamma.

Everyone should know what In the Money (ITM), At the Money 
(ATM), and Out of the Money (OTM) means regarding strike prices.  
These terms indicate if an option has any intrinsic value.  Does
the option have equity, in addition to potential.  On expiration 
day, the time is gone, the potential has passed, the only options
with value are the In the Money (ITM) options.

Traders buy options hoping the intrinsic value increases, or the 
extrinsic value decreases.  Extrinsic is the opposite of intrinsic.
Intrinsic measures the amount in the money, extrinsic measures the 
amount out of the money.

Example:
Let's say a stock is at $ 20.00, the $ 17.50 call is In the Money
(ITM) $ 2.50.  It has $ 2.50 of equity, or intrinsic value.  The 
$20.00 call has no equity, no intrinsic or extrinsic value, it is 
At the Money (ATM).  The $ 22.50 call has no equity, no intrinsic 
value, but the extrinsic value is $ 2.50, it is Out of the Money 
(OTM).  As a general rule, extrinsic value is not used.  Most 
traders consider Out of the Money (OTM) options as having zero 
intrinsic value.  This is true, but you should be aware of the 
existence of extrinsic values.

If in our example, the stock were to rise to $ 22.50 the $ 17.50 
call's intrinsic value would increase $ 2.50 to $ 5.00.  It is now
Deep in the Money (DITM).  The $ 20.00 call would now have intrinsic
value.  It changed from At the Money (ATM) to In the Money (ITM).  
The $ 22.50 call lost its extrinsic value, it went from Out of the 
Money (OTM) to being At the Money (ATM).

Delta varies according to the Laws of option pricing.  The more In 
the Money, the higher the Delta.  As an option's intrinsic value 
increases, so does its Delta..  Options with extrinsic values have 
low Deltas, but as they move from Out of the Money (OTM) towards 
being In the Money (ITM), their Deltas increase.  The higher the 
Delta the more dollar for dollar the option moves relative to the 
underlying.

Gamma measures the rate of change of Delta.  Suppose in our previous 
example, the $ 20.00 call (ATM) had a Delta of .50 (fifty) if the 
stock rose $ 2.50, the Delta might rise to .65 (sixty-five) as the 
option went ITM, the total Gamma would be .15.  Gamma usually shows 
up in pricing models measuring the change of Delta for a $1.00 move 
in the underlying.  Simplistically said, the Gamma in our example on 
the $ 20.00 ATM call was .06.  Delta increased .06 (six) for each 
$1.00 move of the stock.  2.5 times .06 equals .15.  In reality, the 
Gamma might have started at a slightly different figure and changed 
with the stock price.  Don't worry, there isn't a "Greek" to measure 
the rate of change of the rate of change of the rate of change etc.

Delta is speed.  Gamma is acceleration.

I buy options because of Gamma.  I'm a Drag Race fan.

Certain spread trades are set up to earn "free" Deltas through the 
passage of time and/or through adjustments to the position.  If 
being long on an upward price movement is good, being long "free" 
Deltas is even better.

Again I don't mean to tease, but as this series progresses, you 
will learn the basics of option pricing and the basis for hedged 
position trading.

Chris Verheagh
chrisv@OptionInvestor.com



*****************************************************
Last weeks change for this weeks picks:
*****************************************************

Index       Last   Week
Dow      10173.84 341.33
Nasdaq    2593.05  99.68
$OEX       681.34  31.42
$SPX      1348.35  54.65
$RUT       405.86   7.12
$TRAN     3370.40  61.24
$VIX        22.91  -0.43

Stock              Week

CMGI       264.38  77.08 Overwhelming!  Profit taking target
RNWK       207.50  49.62 Anti-gravity stock? Earnings 4/27
EGRP        90.13  29.26 Earnings are 4/20, not 4/12!!!
SCH        126.00  29.26 Split cand. With earnings 4/15
VISX       137.16  23.66 Appears to be made of teflon!
QWST        89.00  14.50 New, earnings run is early!
TLAB       112.38  13.81 Earnings are 4/14, split candidate
MFNX        67.38  12.63 New, pre-earnings run, split cand.
LVLT        84.75  12.50 Earnings are 4/23
AMZN       182.88  11.88 Earnings are 4/27, split candidate
MWD        111.50  11.57 No split yet, but setting new highs!
AOL        159.94  10.94 Didn't buy CBS, but is on the prowl
MER         98.13  10.39 Dropped, earnings are 4/13
VOD        196.13   9.64 About to hit a new high!
PVN        119.00   9.56 Finally! Earnings are 4/22
WMT        102.75   9.50 Had us worried- splits 2:1 on 4/19
CMVT        94.88   8.88 Excitement over 3:2 split 4/15
QCOM       145.56   8.57 The stock that won't stop.
JBL         49.13   8.44 New, strong momentum
BRCM        74.00   8.25 New, looks ready to run
UNPH       129.75   8.19 Getting an early start,earnings 4/26
AEOS        80.00   6.64 Awesome March sales, splits 5/03/99
EMC        134.88   6.25 Ready to turn up the earnings run
SLR         55.88   6.25 New, momentum looks good
COF        158.88   4.50 Waking up again for earnings 4/15
JPM        128.75   4.24 Earnings are 4/19
JNJ         98.00   3.88 Split cand. Shareholder meeting soon
MSFT        94.25   1.56 Time for an earnings run (4/20)
WHR         52.81  -0.25 Dropped, earnings are 4/14
BBBY        36.75  -0.88 Dropped, not moving fast enough

Puts

LTR         70.25  -2.75 Continues to sink lower
LHSG        27.75  -2.01 Recently downgraded
PPG         48.06  -1.88 New, expecting lower earnings
HWP         69.63  -1.75 New, if CPQ announced then so can HP
ABS         52.44  -0.62 Dropped, found a bottom
GM          85.63   0.19 New, disappointing sales numbers
BGEN       114.44   0.94 New, only met estimates, 2 downgrades
RMBS        71.94   5.94 New, if computers are weak?





**************************************
PICK SUMMARY
**************************************

SL  = Suggested stop loss. Sell if bid breaks this price.
OI  = Open Interest - the number of open contracts outstanding.
TP/P= True premium or Time premium
RRR = Risk/Reward/Ratio
ITM = In the money
ATM = At the money
OTM = Out of the money
MTD = Move to double - amount stock must move to double option price
                       in one week. ONE WEEK MOVE ONLY !

Numbers within ( ) are the amount of change for the week.
Numbers within ( ) may be designated with PxW, like P3W, prior 3 weeks

The options with a "*" by the strike price are our choices from the 
group. If the stock moves as expected we feel they have the best 
chance to substantially increase or double in price with the best
risk/reward ratio compared to the other options for the same stock.
You must determine if they fit your risk profile for time and price.

Analysts ratings: 1-2-3-4-5 
Analysts who follow each stock rate it and these rating are 
accumulated and displayed as follows;

Position 1 = number of analysts recommending "strong buy"
Position 2 = number of analysts recommending "moderate buy"
Position 3 = number of analysts recommending "hold" or "neutral"
Position 4 = number of analysts recommending "moderate sell"
Position 5 = number of analysts recommending "strong sell" 

Example rating 5-3-1-0-0 would be 5 "strong buys", 3 "moderate buys",
1 "hold" recommendation.


*****************************************
STOCKS ADDED TO THE PICK LIST
*****************************************

QWST - Qwest Communications
JBL  - Jabil Circuits
MFNX - Metromedia Fiber
SLR  - Solectron
BRCM - Broadcom

PUTS: 

BGEN - Biogen
GM   - General Motors
HWP  - Hewlett Packard
PPG  - Pittsburg Plate Glass
RMBS - Rambus


*****************************************
PICKS WE DROPPED THIS WEEK
*****************************************
Remember that historically, when we drop a pick it will go up 
10 to 15% the very next week. It is part of Murphy's Law.
Just because we drop a stock as a pick does not mean we are
advocating a "sell" on any position you have. We are simply
dropping our recommendation as a new play. Existing plays
can and do continue on and are usually profitable.
*****************************************

CALLS:

MER  $98.13 (+10.38) Merrill Lynch had an outstanding 
week (up $10.38) and has gained $21.38 since we initiated 
coverage. Technically the stock is still positive and we think 
it will continue up on Monday, but it is due to report earnings 
on Tuesday and we don't recommend holding over earnings. Since 
our next letter will not come out until after it reports, we are 
going to drop MER now. Keep MER on your radar screen, though. 
The sector is still strong and MER may very well announce a 
split sometime soon. It last split in June, 1997 at around $120.

BBBY  $38.75 (-.88) When we picked up BBBY after a jump 
up in price, we expected profit taking, so we recommended buying 
it on dips. We did not expect insiders to sell 2,000,000 shares 
immediately after we added it to our list. Even with that large 
sale, BBBY should have performed better by week's end. Its 
$2.81 rise on Thursday had us convinced that it was ready to 
run, but it disappointed us on Friday with a $1.81 loss on 
strong volume. BBBY is sitting on its 10 dma and it may bounce 
and head up next week, but we are dropping it in favor of more 
promising plays.

WHR $52.81 (-0.25)  Our appliance maker seems to be 
stuck in the wash cycle.  We are dropping it as a play until 
it makes a definitive move in one direction or the other.  
As soon as it makes a break above its resistance around $54 
or drops below its support of approximately $52, we will 
consider adding it again as a call or a put.   Also keep 
in mind that WHR reports its earnings on April 14th.


PUTS: 

ABS $52.44 (-.56) We are going to let ABS go as a put play.  
ABS trended lower the whole week, but shot up on Friday.  
We can't find a particular reason why the stock shot up.  
We feel we can find better put plays as ABS seems to have 
found a bottom.


***************************************
STOCK SPLIT CANDIDATES 
***************************************

SCH  - Charles Schwab
QCOM - Qualcomm
AOL  - America On Line
RNWK - RealNetworks
TLAB - Tellabs
PVN  - Providian
VISX - VISX, Inc.
AMZN - Amazon.com
JNJ  - Johnson and Johnson
VOD  - Vodaphone
MWD  - Dean Witter
QWST - Qwest Communications


*****************************************
STOCKS WITH UPCOMING SPLITS 
*****************************************
We don't list all splits available, only those we 
feel may have play possibilities. 

Symbol - Stock      Splits/Date  

INTC - Intel           2:1 04-11-99 ex-date 04-12
EXDS - Exodus Comms    2:1 04-12-99 ex-date 04-13
CMVT - Comverse Tech   3:2 04-15-99 ex-date 04-16 current play
FSR  - Firststar Cor   3:1 04-15-99 ex-date 04-16 
MNMD - MiniMed Inc.    2:1 04-16-99 ex-date 04-19
WMT  - Walmart         2:1 04-19-99 ex-date 04-20 current play
ZQT  - Quicksilver     3:2 04-23-99 ex-date 04-26
FDX  - FDX Corp        2:1 05-05-99 ex-date 05-06
COX  - Cox Comms       2:1 05-13-99 ex-date 05-14
AOC  - Aon Corp        3:2 05-17-99 ex-date 05-18
IBM  - IBM             2:1 05-26-99 ex-date 05-27 
CMGI - CMGI Inc        2:1 05-27-99 ex-date 05-28 current play
EMC  - EMC Corp        2:1 05-28-99 ex-date 05-31 current play
PFE  - Pfizer Corp     3:1 To Be Announced        

For a complete list of all the coming splits check out the
"split calendar" on the side of the online edition newsletter
page.

***************************************************
SPECIAL SHORT TERM SPLIT PLAYS 
***************************************************
We always recommend selling the day of the actual 
split or earlier. Profit taking will drive down the price on 
an average of 7 of 10 splitters immediately after the split.
They may come back in a week or two but why risk it ! 

*****************************************************
CMVT - Comverse Technology, Inc $94.88 (+8.88)(+6.12)

splits 3-2 on April 15th.  

See details in sector list

Chart = http://quote.com/q?s=cmvt&d=3m
*****************************************************
WMT - Wal-Mart $102.75 (+9.50)(-3.19)(-1.63)(+3.13)(+9.25P5W)

Stock Splits 2:1 04-19-99 

See details in sector list

Chart = http://quote.yahoo.com/q?s=WMT&d=3m
*****************************************************
AEOSD - American Eagle $80.00 (+6.62)(+4.19)

Stock Splits 2:1 05-03-99 

See details in sector list

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

THE PLAY OF THE DAY -CALLS- ONLY PLAY IN RISING MARKET

*****************************************************
With all the great plays each week we can never decide
on just one so take your pick. 

*****************************************************
MSFT - Microsoft $94.25 (+1.56)(+3.63)(+3.47)(P7W -4.50) 

See details in sector list

Chart = http://finance.yahoo.com/q?s=MSFT&d=3m
*****************************************************
JNJ - Johnson & Johnson $98.00 (+3.88) 

See details in sector list

Chart = http://finance.yahoo.com/q?s=JNJ&d=3m
*****************************************************
WMT -Wal-Mart $102.75 (+9.50)(P9W+9.25)

See details in sector list

Chart = http://finance.yahoo.com/q?s=WMT&d=3m


***************************************
Brokerage/Banking - Sector
***************************************
COF - Capital One Financial Corp. $158.88 (+4.51)(+10.82)

Capital One is a financial holding company for Capital One 
Bank F.S.B., one of the top 10 credit card companies in the 
US. COF advertises to its Visa and MasterCard customers over 
3,000 combinations of annual percentage rates, credit limits, 
finance charges, and fees that are available on several of its 
different credit cards. As you probably well know, it often 
solicits by mail.

COF had been pretty flat in trading this past week until 
Friday rolled around.  $159.50.  Can you say "new all time 
high?"  COF will report its earnings on Thursday April 15th.  
The strength shown on Friday could be the continuance of COF's 
earnings run.  The financials have been extremely strong as 
of late and could report some incredible numbers.  However, 
remember that we never recommend holding over the actual 
announcement.  You might want to consider closing your 
positions before Thursday. 
 
No new news.

BUY CALL MAY-155 COF-EK OI= 27 at $13.00 SL=10.50
BUY CALL MAY-160*COF-EL OI=144 at $10.63 SL= 8.75
BUY CALL JUN-160 COF-FL OI= 20 at $13.00 SL=10.50 

Picked on April 4th at $154.38      PE = 40
Change since picked     +$4.50      52 week low =$ 51.75
Analysts Ratings    10-5-1-0-1      52 week high=$159.50
Last earnings  01/99  est 0.86      actual 1.04 
Next earnings  04-15  est 1.18      versus 0.96
Average Daily Volume = 447.6 K
Chart = http://quote.yahoo.com/q?s=COF&d=3m

******

PVN - Providian Financial $119.00 (+9.56)(+1.75)(-.06)

Providian Financial provides credit, investment services, and 
insurance protection to individual consumers. It is the 
nation's top secured card provider, and is also a leading 
Visa and Mastercard provider. In addition, it recently bought 
GetSmart, giving it an e-commerce loan division. Headquartered 
in San Francisco, PVN still provides traditional banking 
services in its home state of New Hampshire.

We recommended PVN earlier this year, and enjoyed over $20.00 
of gains during the play. We dropped it while it went through 
a correction, but we were watching for a bottom. When PVN 
bounced off its 50 dma on 3-24, we picked it up again. PVN has 
powerful momentum once it gets going--just look at its chart! 
Although its PE is high, the company believes 50% earnings 
growth is possible this year and one fund manager believes it 
could be even higher, so its price to earnings GROWTH is not out 
of line. Piper Jaffray's analyst believes a decline in 
bankruptcies will help PVN reach a price target of $125. 
Furthermore, we think PVN could announce a split with earnings 
in a couple of weeks. It last split 3:2 in December, 1998, but 
price gains make a 2:1 split a possibility this time--and it 
has enough authorized shares to do it.

On Monday, DLJ initiated coverage of PVN with an "outperform". 
Then mid-week 2 European banks lowered interest rates, a move 
that will help the financial stocks. On Friday PVN added $4.31 
and broke out to close above resistance, although volume was 
a little light. We expect PVN to gain momentum as it approaches 
its earnings date. Note: Providian could not yet verify Zacks 
4-22 or First Call's 4-26 earnings date for us. We will call 
them again this week, but be forewarned that 2 quarters ago PVN 
unexpectedly announced 1 week early.

BUY CALL MAY-115 PVN-EC OI= 49 at $11.00 SL= 8.75
BUY CALL MAY-120*PVN-ED OI= 20 at $ 8.63 SL= 6.50
BUY CALL JUN-120 PVN-FD OI= 48 at $11.00 SL= 8.75

Picked on Mar 28th at $107.69      PE = 56
Change since picked  +$ 11.31      52 week low =$ 28.38
Analysts' ratings   7-5-2-0-0      52 week high=$118.44
Last earnings 12/98 est  0.62  actual 0.66 surprise=6%
Next earnings 04-22 est  0.72  versus 0.39
Average daily volume = 853.2 k
Chart = http://quote.yahoo.com/q?s=PVN=3m

******

JPM - JP Morgan & Co $128.75 (+4.25)

JPM is a premier international banking firm headquartered in
the US. It is a holding company for subsidiaries engaged in 
global banking and investment.  They offer services to 
corporations, institutions, and, of course, the very wealthy.

JPM broke through its resistance at $124-125 on Wednesday and 
hasn't looked back.  It dipped a little on Friday losing -1.25, 
but still stayed above $128 during trading.  This is basically 
an earnings run play with the added benefit of a strong 
financial sector fueled by stable interest rates here and the 
recent rate cut overseas.  The earnings report is expected 
April 19th - we're still waiting for confirmation regarding 
the time.  If you chose to play aggressively and bought April
contracts, remember they expire this Friday!  Nevertheless, 
you should sell by Friday anyway as it's very risky to hold 
over an earnings report and we never recommend it.

There continues to be strong optimism for solid 1Q results 
throughout the financial sector.  Analysts have particular 
confidence in companies with investment banking operations 
or capital markets.  Last week, IFR Securities Data 
announced JP Morgan & Co topped the advisor list for mergers
& acquisitions for the 1Q in both Europe and Latin America.

BUY CALL MAY-125 JPM-EE OI= 118 at $ 9.75 SL= 7.25
BUY CALL MAY-130*JPM-EF OI=1705 at $ 7.50 SL= 5.75
BUY CALL JUN-130 JPM-FF OI= 587 at $ 9.13 SL= 6.75

Picked on April 8th at  $130.00   PE = 25
Change since picked       -1.25   52 week low = $ 72.12
Analysts Ratings      1-5-8-0-0   52 week high= $148.75
Last earnings 12/98 est=  .37     actual= .42
Next earnings 04-19 est= 1.47     versus= 1.80
Average Daily Volume = 978.8K
Chart = http://quote.yahoo.com/q?s=JPM&d=3m

******

MWD - Morgan Stanley Dean Witter $107.50 (+11.57)(+1.00)(+.50)

MWD is a diversified financial service organization which 
provides services in three main areas: securities, asset 
management and credit services.  The company was formed 
through the merger of Morgan Stanley Group Inc. and Dean 
Witter Discover & Co. in June 1997.  Credit services consist 
primarily of the issuance, marketing and servicing of the 
discover card.  The company provides financial and securities 
services on a global scale and credit and transaction services 
nationally.  The securities business serves the investment 
needs of clients by providing a range of financial products, 
services and investment advice.  During 1997 the company acquired 
Discover Brokerage Direct In (formerly Lombard Brokerage Inc).
MWD continued higher this week and in strong fashion.  The
chart is very telling on this stock.  The chart tells us that
we might see a little bit of a pullback and then a run for
more new highs.  MWD is seeing strong gains based on strong
earnings and the expectation of strong earnings from other
brokers and financial institutions.  

MWD had its shareholder meeting on Friday and a stock split
was not announced.  This was disappointing, but we'll take
the $4 gain on Friday.  Many companies have waited for a
time when their stock is struggling before announcing a
split.  This could happen at any time.  We still like MWD
because the street is buying the financials.

BUY CALL MAY-105*MWD-EA 0I=1449 at $11.50 SL= 9.00
BUY CALL MAY-110 MWD-EB OI= 486 at $ 8.25 SL= 6.25
BUY CALL JUL-105 MWD-GA OI= 324 at $15.50 SL= 9.75 
BUY CALL JUL-110 MWD-GB OI=1044 at $11.88 SL= 9.25

Picked on Feb.6th at   $89.00   PE = 17
Change since picked    +18.50   52 week low =$ 36.50 
Analysts Ratings    5-4-4-0-0   52 week high=$112.00
Last earnings 03/99 est= 1.34   actual= 1.76
Next earnings 06-26 est= 1.36   versus= 1.37
Average daily volume = 2.23 mln
Chart = http://quote.yahoo.com/q?s=MWD&d=3m

*****

SCH - Charles Schwab $126.00 (+31.75)(+25.19 P7W)

Charles Schwab is a holding company with subsidiaries that 
provide financial services, which include discount brokerage, 
trade execution, investment, advisory services, and admini-
strative services. One subsidiary performs clearing and 
account maintenance and another is a market maker in Nasdaq 
securities. Schwab is the largest discount brokerage in the 
U.S., and operates 235 branch offices in 46 states, Puerto 
Rico, and the U.K. On Feb.8, it also entered the Canadian 
market through an acquisition.

The online brokerage stocks are sizzling hot!  Continuing 
increases in the growth in securities trading over the Internet 
is sending them ever higher. They are now trading more like 
Internet stocks than brokerage stocks. Charles Schwab is the 
industry leader with about 30% of the online trading market and 
a current growth rate that is phenomenal. (New subscribers should 
read last Sunday's write-up for details and numbers on Schwab's 
recent growth.) It's $51 billion market cap now exceeds Merrill 
Lynch's by about $16 billion. SCH is spending millions to improve 
its web site, speed, and capacity. We are now into earnings 
season and DLJ and MWD have already announced strong earnings. 
MER is next. More positive announcements would serve to fuel a 
further rise in Schwab's stock price as it approaches its own 
earnings announcement.

Schwab had an incredible week, setting new highs each day. Friday 
it closed right near the high of the day and trading volume was 
heavy. All of those traders buying Internet stocks through their 
online brokers have realized that those same brokers ARE Internet 
stocks in a way and some of them, like Charles Schwab, have 
PROFITS---profits that are growing. Schwab reports earnings on 
April 15th, this Thursday. It is on our split candidate list, 
but a 2:1 split would require authorization of more shares and 
shareholder approval at its meeting in May. Remember, we don't 
recommend holding over earnings, especially a stock with such a 
huge run-up as this one.

These are the highest strikes currently available:
 
BUY CALL MAY-120 SCH-ED OI=722 at $16.63 SL=13.00
BUY CALL MAY-125*SCH-EE OI=  0 at $14.00 SL=11.25 NEW STRIKES
BUY CALL MAY-130 SCH-EF OI=  0 at $11.75 SL= 9.25 volume=26 FRI

Picked on Feb 21st at $69.06       PE = 139
Change since picked  +$56.94       52 week low =$ 18.50
Analysts Ratings   2-0-5-0-0       52 week high=$117.50
Last earnings 12/98 est 0.23   actual 0.26 surprise=+13%
Next earnings 04-15 est 0.32   versus 0.17
Average daily volume = 2.13 mln
Chart = http://quote.yahoo.com/q?s=SCH&d=3m

******

EGRP - E*Trade Group $90.13 (+29.25)(+3.00)(P4W +13.81)

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. 

A house keeping item before we start: We reported 
erroneously Thursday that earnings would be released April 
12 based on First Call information, which in this case and 
lots of others is WRONG!  Don't always believe it.  We 
encourage you verify these dates yourself during your own 
research.  While we make every effort to talk with the 
reporting companies to confirm the dates, we can only 
report from other published sources until we actually speak 
with a live person at the company.  

Anyway, we're not fear mongering here, but with such a fast 
run-up, we confess, we're getting a nosebleed.  EGRP's 
altitude gained 50% this week and gravity will take over, 
or at least flatten the rise.  Some Internet stocks and on-
line brokers were showing weakness on Friday after a 
stellar week.  Caution aside, EGRP is on a tear since they 
will issue their earnings report of April 20 before the 
open, only 6 trading days away (company confirmed).  While 
they are not expected to show a profit, the loss is 
expected to be narrower than Street estimates of -$0.17.  
Their account base has be growing faster than anticipated 
and they are sinking their operating profits into new 
services, plus new print and TV advertising campaigns to 
build the brand ahead of their competitors.  Technically, 
the MACD chart is "way-positive".  Keep your eyes peeled on 
the average daily volume.  It decreased by 100 K shares 
last week indicating buyers are decreasing slightly; no 
need to panic .  Enjoy the ride to earnings, but remember 
to place a stop order immediately following your entry.  
Unless you're a gunslinger, it's safer to stay off this 
street.

The news is in the news!  The sector run-up has stirred 
lots of news-generating opinions, which has turned the buzz 
into the loud drone of a locust onslaught.  As much as it 
bugs us that talking heads (CNBC) can talk a stock into 
rapid movement, that's the market we deal with.  To wit, 
on-line day traders, following Peter Lynch-like advice of 
buying what you know, are playing the on-line brokers, who 
CNBC claims are responsible for the unjustifiable run-up.  
Their spin can panic this sector into a quick sell-off.  
Itchy trigger fingers work both ways.  Again, sleep with 1 
eye open.

BUY CALL MAY-85 QGZ-EQ OI=550 at $15.75 SL=12.25
BUY CALL MAY-90*QGZ-ER OI= 86 at $13.50 SL=10.75
BUY CALL MAY-95 QGZ-ES OI= 49 at $11.00 SL= 8.75
BUY CALL JUL-90 QGZ-GR OI= 13 at $19.00 SL=14.75
BUY CALL JUL-95 QGZ-GS OI=  4 at $17.00 SL=13.25

Picked on April 3 at   $60.88         PE = n/a
Change since picked    +29.25         52 week high=$97.62
Analysts Ratings    3-4-3-0-0         52 week low =$ 5.00
Last Earnings 01/99 est -0.14 actual -0.12 surprise = 14%
Next Earnings 04-20 est -0.16 versus  0.08
Average daily volume = 7.2 mln. 
Chart = http://finance.yahoo.com/q?s=EGRP&d=3m


******************************

PLAYS CONTINUED IN SECTION THREE.

******************************
SEE DISCLAIMER IN SECTION ONE
******************************







The Option Investor Newsletter          4-11-99
Sunday             Part 3 of 6

*********
Internet
*********

AMZN - Amazon.com, Inc $182.88 (+11.88)(+31.94)

Amazon.com uses the internet to sell books, CDs, and videos.  
They're billed as the largest bookstore retailer in the world.  
They offer almost 5 mln different choices - including 
out-of-print titles - at discounts of up to 40%.  Amazon 
buys directly from distributors or publishers and typically 
delivers an order to its customers within 2-3 days. They are 
presently expanding into other Web-based enterprises.

It's been another blockbuster week for AMZN.  It gained 
almost 12 points and just yesterday tacked on +3.88 during 
the Internet rally.  AMZN is having a great run.  The stock 
did hit the mid-190's once this week, but the true overhead 
resistance is around $186-187.  With an expected positive 
earnings report just around the corner and the possibility 
of a split, it could break through that barrier. The 
earnings date for AMZN was confirmed with the company and 
they will officially report on April 28th after the bell. 
Internet Analyst, Keith Benjamin, from BancBoston Robertson 
Stephens is still focused on Amazon announcing strong 
earnings and was further encouraged by Yahoo's recent report.

(note: AMZN actually has a vote to increase shares in 
their upcoming shareholder meeting!)

Last week was filled with tidbits of news.  Wal-Mart and 
Amazon settled their legal battle over allegations that 
Amazon was recruiting former Wal-Mart employees for trade 
secrets - no cash damages were paid.  And some hefty 
competition came into the picture.  Music giants, Universal 
Music Group and Bertelsmann's BMG, announced their joint 
venture to go online with getmusic.com. AMZN was steadfast 
and didn't bow out on the announcements or give up too much 
to the profit-takers.  It appears the stock could continue 
its ascent and provide stellar opportunities for profits.  
Always protect your positions and put stops in place.

BUY CALL MAY-170 YQN-EN OI= 691 at $28.38 SL=22.25
BUY CALL MAY-180*YQN-EP OI=1228 at $23.50 SL=18.25
BUY CALL MAY-190 YQN-ER OI=1892 at $18.63 SL=14.50
BUY CALL JUL-190 YQN-GR OI= 389 at $31.63 SL=24.75

Picked on April 2nd at $171.00   PE = n/a
Change since picked     +11.88   52 week low =$12.87
Analysts Ratings     7-5-8-0-0   52 week high=$199.12
Last earnings 12/98 est= -.18 actual= -.14 surprise= 22.22%
Next earnings 04-28 est= -.29 versus= -.07
Average daily volume = 10.1 mln
Chart = http://quote.com/q?s=AMZN&d=3m

*****

AOL - America On Line $159.94 (+9.94)(+24.31)(P7W+43.69)

America Online is the largest online Internet access 
service in the world.  Membership now exceeds 18 million 
users, including its Compuserve division.  With 25,000 new 
users added per day (1,000,000 in the first 40 days of the 
quarter), and growing advertising revenues, AOL has been 
called the blue chip of the Internets.  AOL is now the 
proud owner of Netscape.   Revenues should exceed $4.5 
billion in FY99, up from $2.6 billion in FY98.

Volume was huge last week as funds continue their scramble 
to take a position.  The late week fallback that halved 
early week gains is attributable to profit taking from 
those already in the stock, in other words a big rotation 
to new investors.  Retirement money still needs to be put 
to work, and AOL is still the Internet darling funds will 
buy.  In short, when profit taking hits, buyers are willing 
to step in.  Technically, MACD has fallen off a bit, but is 
still positive.  AOL's been on a steep ascent and needs to 
take a deep breath.  It shouldn't last long, as AOL will 
begin its run to earnings scheduled April 27, after the 
close (company confirmed).  We may also get another split 
announcement since, historically, AOL has split at or above 
$120.  There are enough shares for a 3:2, but a 2:1 would 
require shareholder approval.   The current consolidation 
is giving us a buying opportunity.  Careful.  Since the 
market has been setting new records and runs in cycles 
(3,5,7, etc. days), we could get a market wide profit 
taking day this week.  Internets are particularly 
vulnerable.  Confirm market direction before playing.  

Rumors continue to circle that AOL will make a bid for CBS.  
CNBC reported emphatically that their sources confirm there 
is no truth to the rumor.  In other news, AOL's Netscape 
division reached agreement with Fed-X to build a "shipping 
portal", which will take advantage of the huge business to 
business commerce conducted over the Internet.

BUY CALL MAY-155 AOO-EK OI=5303 at $19.75 SL=15.50
BUY CALL MAY-160*AOO-EL OI=6239 at $17.63 SL=13.75
BUY CALL MAY-165 AOO-EM OI=4163 at $15.25 SL=12.00
BUY CALL JUL-160 AOO-GL OI=6259 at $26.63 SL=20.75
BUY CALL JUL-165 AOO-GM OI=2080 at $24.38 SL=19.00

Picked on March 14 at $96.13         PE = 730 (really!)
Change since picked   +63.81         52 week high=$175.00
Analysts Ratings  23-8-0-0-0         52 week low =$ 16.69
Last Earnings 01/99  est .09 actual .09 surprise =0%
Next Earnings 04-27  est .09 versus .04
Average daily volume =  23.6 mln. (skewed by recent split)
Chart = http://quote.yahoo.com/q?s=AOL&d=3m

*****

CMGI - CMGI, Inc. $264.38 (+77.08)(+1.18)

CMGI is a direct market service provider which invests in, 
develops and integrates advanced internet, interactive and 
database management technologies.  The company and its 
subsidiaries offer a wide variety of direct marketing 
services including internet and interactive media direct 
marketing software technologies, literature fulfillment and 
turnkey outsourcing and business-to-business telemarketing 
services.  The company also offers accurate mailing lists, 
database management, design and development capabilities, 
consultative list management and brokerage services. 

CMGI had a fantastic week as it attained new highs.  The
euphoria in the Internets continued this last week and CMGI
is considered one of the blue chip Internet companies.  CMGI
is also a benefactor of the takeover mania.  CMGI has its
hands in many different companies and when these companies
are takeover candidates, it benefits CMGI.  Watch for profit
taking before purchasing new calls.  

CMGI is in stock split territory, but its earnings aren't
until July and its shareholder meetings are in December.
There is always a chance of a special board of directors
meeting, but a split is more likely with earnings in June.

!-if the CPQ warning turns the NASDAQ, CMGI could fall
quickly!

BUY CALL MAY-260 GCB-EL OI= 7 at $34.50 SL=26.00
BUY CALL MAY-270*GCB-EN OI=16 at $29.75 SL=23.00
BUY CALL JUN-260 GCB-FL OI=14 at $44.25 SL=35.00
BUY CALL JUN-270 GCB-FN OI= 5 at $39.88 SL=31.00

Picked on Mar 23rd at $164.00   PE = 701
Change since picked   +100.38   52 week low =$ 13.52
Analysts Ratings    2-6-1-0-0   52 week high=$266.00
Last Earnings 03/99  est -.23   actual .28 surprise +222% 
Next Earnings 06-12  est -.20   versus .00
Average daily volume = 3.83 mln.
Chart = http://quote.yahoo.com/q?s=CMGI&d=3m

*****

RNWK - RealNetworks $207.50 (+49.62)(-21.88)(+46.63)(P4W+38.03)

RealNetworks pioneered the streaming software that allows 
audio and video broadcasters to deliver their products over 
the World Wide Web in real time.  The company's RealPlayer 
software is used by more than 30 million Web surfers who 
download the software for free.  Software license fees from 
broadcasters account for more than 75% of RealNetworks' sales.  
Companies that have purchased the company's broadcasting tools 
and services include ABC, At Home (Internet services), Dow 
Jones, and NBC. 

RNWK just kept defying gravity last week and continued to 
move up.  The reason we keep this stock as a pick is because
it has earnings coming up in a few weeks and a stock split
is very likely.  In the meantime, watch for pullbacks either
on an intra-day basis or perhaps over a few days.  During
this runup, RNWK has rarely dropped for more than a few
days.  

RNWK continues to reach agreements with different websites
that will use RNWK's streaming media.  There is a lot of
excitement on the street about this stock.

BUY CALL MAY-210 RNW-EB OI=68 at $37.13 SL=28.00
BUY CALL MAY-220*RNW-ED OI=92 at $33.00 SL=25.00
BUY CALL MAY-230 RNW-EF OI=27 at $29.75 SL=23.00
BUY CALL AUG-240 RNW-HU OI=18 at $47.00 SL=37.00

Picked on Feb.27th at   $70.13   PE = n/a
Change since picked    +137.50   52 week low =$ 14.50
Analysts Ratings     1-7-0-0-0   52 week high=$220.63
Last Earnings   01/99 est -.04   actual -.02
Next Earnings   04-27 est -.02   versus -.07
Average daily volume = 1.35 mln
Chart = http://quote.yahoo.com/q?s=RNWK&d=3m


**************
Communications
**************

VOD - Vodafone $196.13 (+9.63)(+14.31)(P3W-8.81)

Vodafone, serving over 9.1 mln. telecom customers 
worldwide, is the largest mobile telecommunications 
provider in the UK.  28% of their revenue is generated from 
operations in 12 additional countries.  They also operate 
messaging, paging and mobile data services over their 
analog and digital networks.  Upon completion of their 
purchase of AirTouch, Communications, a former spin-off of 
Pacific Bell, VOD will more than double in size to 
approximately $10 bln in sales.  There are no anti-trust 
issues; the FTC has already cleared the way.

VOD has enough gapping action to get orthodontists excited!  
We are sitting just under resistance of $197.75.  One more 
push with volume will launch VOD into orbit.  The technical 
chart is still MACD positive.  If the market cooperates, 
following what we expect will be a one or two day 
correction (remember, market run in cycles and we can't set 
a new record every day), we'll get our breakout.  There are 
three ways to play: target shoot intraday at $192; wait for 
Mr. Market's profit taking day in hopes of getting in at 
$188-$190 (opportunity risk if it never retreats this far); 
or wait for the breakout over $198 with volume (safest, but 
smaller reward).  It's hard to set stops on gapping stocks, 
but do it anyway and confirm market direction before 
playing.

A VOD earnings report was to have been issued March 31 from 
the U.K., VOD's home.  Unfortunately, international 
financial information is not always readily available since 
reporting requirements aren't as stringent (VOD reports 
only twice a year), but should be forthcoming in an SEC 
filing.  We do know that earnings did not disappoint and 
that VOD's betrothed (Q3 or Q4 wedding), AirTouch Cellular 
(ATI), which is larger revenue-wise than VOD, will report 
earnings April 22, before the open.  Thanks to ATI's use of 
CDMA technology, which carries 20 to 40 times the capacity, 
requires less power to operate and offers clearer 
transmission than TDMA technology used by AT&T, ATI's 
revenue is growing like a weed.  Watch for this to rub off 
on VOD shares.

*** Caution- May strikes are thinly traded

BUY CALL MAY-190 VOD-ER OI= 12 at $12.75 SL=10.25
BUY CALL MAY-195*VOD-ES OI= 12 at $10.13 SL= 7.25
highest strike available
BUY CALL JUL-195 VOD-GS OI=519 at $14.75 SL=11.50
BUY CALL JUL-200 VOD-GT OI=357 at $13.38 SL=10.50

Picked on April 3 at $186.50       PE = 85
Change since picked    +9.63       52 week high=$197.75
Analysts Ratings   3-3-1-0-0       52 week low =$ 94.00
Average daily volume = 687 K
Chart = http://finance.yahoo.com/q?s=VOD&d=3m

*****

CMVT - Comverse Technology, Inc $94.88 (+8.88)(+6.12)

Comverse is the world's leading supplier of enhanced services 
platforms to wireless and wireline network operators.  For 
instance, their AudioDisk and Ultra lines are communication 
monitoring systems used by police, emergency 911, and even 
financial institutions. They are also the 3rd largest firm in 
the voice-mail market, only behind Lucent and Northern Telecom

CMVT piped up 10% this week on optimism for the 3:2 split 
scheduled for "Tax Day", April 15th.  On Monday and Thursday, 
the stock had the most gains on strong volume.  With trading 
volume a little low for CMVT yesterday, it only held a +0.63 
for the day.  Nonetheless, the stock still touched on its 52 
week high, set the previous day, at $95.13.  

This play is purely a pre-split run and no news is behind its 
momentum.  Remember, the split date is next week and we never 
recommend holding over that date because the odds are not in 
our favor - 7 out of 10 stocks succumb to post-split depression.

BUY CALL MAY- 90 CQV-ER OI=199 at $10.25 SL=7.75
BUY CALL MAY- 95*CQV-ES OI= 34 at $ 6.75 SL=5.00
BUY CALL MAY-100 CQV-ET OI=  5 at $ 5.13 SL=3.25

Picked on April 2nd at  $86.00   PE = 36
Change since picked      +8.88   52 week low =$29.37
Analysts Ratings     9-2-0-0-0   52 week high=$95.13
Last earnings  01/99 est= .63   actual= .66 surprise= 4.76%
Next earnings  06-15 est= .66   versus= .51
Average daily volume = 741.2K
Chart = http://quote.com/q?s=cmvt&d=3m

*****

QCOM -  QUALCOMM Inc. $145.56 (+8.56)(+25.44)(+27.00)(P3W+11.55)

Wireless digital communications are QCOM's specialty.  They 
have developed "CDMA" technologies used in cellular, personal 
communication, and wireless local loop systems.  The trucking 
industry uses QCOM's OmniTRACS two-way satellite messaging and 
position tracking systems.  Qualcomm has currently teamed up 
with Loral space to develop the Globalstar satellite system to 
offer telecommunication services worldwide.  Eudora, a type of 
e-mail software, is also a QCOM production.

QCOM is still on a roll.  The company managed to post big gains 
again this week by adding a total of +$8.56.  It even set a new 
all time high of $155.25 back on Monday April 5th.  Friday's dip 
may prove to be your entry point.  However, wait for the stock 
to show the change in direction before initiating any new plays.  
Keep in mind that QCOM has  plenty of authorized shares for a 
2:1 split.  It split back in early '94 at the $60 level.  So, 
you can definitely see how we are in split territory.  An 
announcement could possibly be released along with their 
earnings on April 20th.

News:  QCOM was added to the Fortune 500 list.  The honor is 
bestowed to the companies with the best revenues for 1998.   
In other news, QCOM may let go as many as 500 workers after 
completing the sale of one of its units to Ericsson.  

BUY CALL MAY-145 AAW-EI OI=150 at $15.25 SL=12.00  
BUY CALL MAY-150*AAW-EJ OI=429 at $13.13 SL=10.50
BUY CALL JUL-150 AAW-GJ OI=126 at $18.75 SL=14.75
 
Picked on March 9th at $79.75      PE = 89
Change since picked   +$65.81      52 week low =$ 37.75
Analysts Ratings    5-6-5-0-0      52 week high=$155.25
Last earnings 01/99 est 0.58   actual 0.65 surprise=+12% 
Next earnings 04-20 est 0.25   versus 0.58
Average Daily Volume = 2.39 mln
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m

*****

TLAB - Tellabs Inc. $112.38 (+13.81)(+5.06)(+1.44)(+1.69)

Tellabs, Inc. designs, assembles, markets and services a 
diverse line of electronic communications equipment.  These 
products are used worldwide by public telephone companies, 
long-distance carriers, alternate service providers, cellular 
and other wireless service providers, cable operators, 
government agencies, utilities and business end-users.  The 
TITAN cross-connect system family is the key element of the 
companies product portfolio.  

TLAB continued to have a nice pre-earnings run.  Earnings
are on the 14th after market close.  We feel a stock split
is likely either with earnings or at the shareholder meeting
on April 22nd.  Though there are a lot of analysts that feel
telecommunication stocks are looking strong, we are playing 
this as a earnings and stock split play.  

BUY CALL MAY-110 TEQ-EB OI= 604 at $11.00 SL= 8.50 ITM $2.38
BUY CALL MAY-115*TEQ-EC OI=   8 at $ 8.13 SL= 6.25 volume=82 Friday.
BUY CALL JUN-110 TEQ-FB OI=1168 at $13.25 SL= 9.75 ITM $2.38

Picked on Mar.13th at   $90.69   PE = 38
Change since picked     +21.69   52 week low =$31.38
Analysts Ratings   13-15-1-0-0   52 week high=$99.75
Last Earnings    01/99 est .59   actual .62
Next Earnings    04-14 est .49   versus .37
Average daily volume = 2.68 mln
Chart = http://quote.yahoo.com/q?s=TLAB&d=3m

*********
Software 
*********

MSFT - Microsoft $94.25 (+1.56)(+3.63)(+3.47)(P7W -4.50) 

From their own words, "Microsoft Rules." Although it's 
current reign is being rocked with revolution, the Evil 
M-pire (as some programmers and anti-Internet Explorer 
browser patriots call it), has been fighting the Federal 
government on anti-trust grounds for months. The line to 
take their turn and bad mouth the bully was long and 
distinguished.  Their defense was pitiful.  The fact is, 
MSFT is good at what they do.  They are the world's #1 
software company (Y2K compliant or not!) and their 
operating systems dominate the PC landscape. 

Forget the fact that MSFT traded virtually flat last week 
at approximately $94.  After the close Friday, CPQ, whose 
stock halted trading prior to the close, announced that 
earnings would be $0.15, only half of Wall Street's $0.31 
estimates.  That sent MSFT down to $92.75 in after hours 
trading on Friday.  Fortunately, after short-baiters 
finished chumming the water with multiple cheap trades, 
15,000 shares traded back up at $94.25.  Short-baiters 
(yes, our made up word) are short sellers who try to induce 
a bit of panic by throwing out multiple 100-500 share lots 
at cheap asking prices to scare others into selling before 
it's too late, as in "Uh-oh, the price is dropping; I 
better sell."  Nonetheless, it's likely we'll see MSFT 
trade lower at the open.  Market willing, it should recover 
after rush hour as investors realize MSFT is a master at 
guiding the Street and is already fully aware of how much 
they sell to CPQ, meaning there are no surprises to report.  
For the play, MACD has turned negative on low volume, which 
tells us that demand has fallen off, but there are no 
sellers either.  Now is the time to scale into MSFT for an 
earnings run.  They are due to report in 7 trading days, on 
April 20 after the close (company confirmed).  If history 
is any indicator, MSFT will have managed the Street 
expectations to under-reflect actual results.  Keep your 
stops set and of course, confirm market direction before 
starting a new play.

In the news, rumors are still afloat that MSFT will release 
the source code for Windows 2000.  Yea, right.  Not likely 
anytime soon as it's contrary to their philosophy.  Also 
some idle chatter that MSFT is concerned that corporate 
America stepped up Q4 1998 spending on software, thus 
causing those anomaly blowout earnings, which are not 
likely to be repeated.  This is the art of MSFT guiding the 
street lower so that when they do report earnings, the 
audience will shake their head in amazement as MSFT pulls 
the rabbit out of their hat again.  No trial or settlement 
news this week.

BUY CALL MAY- 90 MSQ-ER OI= 7968 at $8.63 SL=6.50
BUY CALL MAY- 95*MSQ-ES OI= 7700 at $6.00 SL=4.25
BUY CALL MAY-100 MSQ-ET OI=13220 at $3.88 SL=2.25
BUY CALL JUL- 95 MSQ-GS OI=10519 at $8.75 SL=6.75
BUY CALL JUL-100 MSQ-GT OI=14315 at $6.63 SL=4.75

Average daily volume = 34.9 mln. (skewed by split)
Chart = http://quote.yahoo.com/q?s=MSFT&d=3m


***********
PC Hardware/electronics
***********

EMC - EMC Corporation $134.88 (+6.25)(+5.75)(P6W +20.51)

EMC is a Fortune 500 company that designs, manufactures, 
markets and supports high performance storage products.  
The company's products store retrieve, manage, protect and 
share information from all major computing environments, 
including UNIX, Windows NT and mainframe platforms.  EMC 
markets its memory products under the name Symmetrix.  EMC 
and its enterprise storage systems have developed a clear-
cut technological edge over its competition.  The company 
has been able to successfully leverage its leadership 
position in the mainframe storage area into the lucrative, 
faster growing open systems market.  They have 35% market 
share in the storage business.

Merrill Lynch to the rescue!  As we reported Thursday, the 
firm rendered a list of companies likely to fail to beat 
estimates.  EMC was one of their noted exceptions and the 
Street cheered.  Technically, EMC is very positive, though 
volume has been average during last week's rise.  Look for 
EMC to pick up speed as it reports earnings April 20, 
before the open (company confirmed).  The last 3 days have 
traded flat, but market willing, it won't last long.  
Confirm market direction before playing.  Be careful of Mr. 
Market when he decides to have a profit taking day.  
Consider the dips a buying opportunity (target shoot).  
Keep your stops set.

Merrill Lynch's announcement was the significant news last 
week.  However, EMC continues to benefit from the IBM 
equipment and technology agreement, and the Lehman Bros. 
coverage, wherein Lehman stated, "the company has become a 
category leader and continues to demonstrate an ability to 
deliver outstanding results and we believe the shares 
represent an attractive long-term value."  While current 
revenues are about $5 bil., they are looking for revenue of 
$10 bln. by 2001, 1999 EPS of $2.00 and 2000 EPS of $2.60.  
Nice math!

BUY CALL MAY-130 EMB-EF OI=2627 at $13.00 SL=10.50
BUY CALL MAY-135*EMB-EG OI=1049 at $10.00 SL= 7.50
BUY CALL MAY-140 EMB-EH OI= 534 at $ 8.25 SL= 6.25
BUY CALL JUL-135 EMB-GG OI= 600 at $15.75 SL=12.25
BUY CALL JUL-140 EMB-GH OI=1379 at $13.75 SL=11.00

Picked on Feb 14th at $118.25    PE = 90
Change since picked    +16.63    52 week low =$ 35.81
Analysts Ratings   10-6-0-0-0    52 week high=$134.94
Last earnings   12/98 est .46    actual .48
Next earnings   04-20 est .39    versus .28
Average Daily Volume = 4.3 mln.
Chart = http://quote.yahoo.com/q?s=EMC&d=3m

*****

SLR - Solectron $55.88 (+6.25)(+2.69)(P3W +4.13)

Solectron is the world's largest contract manufacturer of 
electronic systems and components in varied industries.  
Its product range includes consumer electronics, computers, 
medical and industrial instrumentation, semiconductors, 
communications and avionics for original equipment 
manufacturers like Mitsubishi, Cisco and Hewlett-Packard.  
Service-wise, they provide product design and prototyping, 
systems assembly, software duplication, packaging, and 
warehousing.  Twice, they have been awarded the Malcolm 
Baldridge award, given for manufacturing excellence.  
Annual revenues are approximately $8 bln.

Everything about this company reeks of quality and 
reliability - a darn good smell!  Let's take a sniff of the 
fundamentals: earnings of $0.26 for the quarter reported 
March 16 versus $0.20 the previous year (on target); 31% 
average earnings growth over the last 5 years; 20% return 
on equity; $200 mln. cash.  Technically, SLR hit new highs 
every day last week in the wake of semiconductor industry 
optimism.  Surprisingly, recent volume has been below 
average.  No matter, the chart, especially MACD looks 
great.  It's just plain strong with solid momentum.  SLR 
split 2:1 in late February, so we won't see that again 
until it gets closer to $80.  Next earnings are estimated 
at June 15, a ways off.  With the breakout into uncharted 
territory, enjoy the ride!  Confirm market direction before 
playing.

Another week, another quality award.  This time it's the 
National Team Excellence Award from the Association for 
Quality and Participation (AQP) for SLR's systematic 
quality improvement methods.  Last week they also became 
the first American electronics manufacturer to open 
production facilities in Japan.

BUY CALL MAY-50 SLR-EJ OI=179 at $8.00 SL=6.25
BUY CALL MAY-55*SLR-EK OI=203 at $4.75 SL=3.00
BUY CALL JUL-55 SLR-GK OI= 21 at $6.63 SL=5.00
55s are the highest strike available

Picked on April 11 at $55.88    PE = 58
Change since picked    +0.00    52 week low =$17.69
Analysts Ratings   4-9-0-0-0    52 week high=$56.25
Last earnings  03/98 est .26    actual .26
Next earnings  06-15 est .29    versus .21
Average Daily Volume = 1.9 mln.
Chart = http://quote.yahoo.com/q?s=SLR&d=3m

*************
Drug-Biotech
*************

VISX - VISX, Inc $137.16 (+23.66)(+18.25)

VISX can help you see the world more clearly.  The company
makes a laser-vision correction system (LVC) designed to 
recontour the surface of the cornea.  Opthamologists using 
the VISX system - an excimer laser and computerized 
workstation - can correct nearsightedness and astigmatisms 
in typically about 30 minutes.  More complex pathological 
vision disorders can also be corrected.  VISX markets their 
product through 20 distributors and has the system installed 
in 45 countries.  The VISX system is the only excimer laser 
currently approved by the FDA.

The momentum for this earnings run has been unstoppable.  
VISX has gained over $41 in the last two weeks and shows no 
signs of slowing down.  Except for some slight consolidation 
on Wednesday (a miniscule -3.50), this stock has provided 
only premium profits.  This run is primarily fueled by the 
exploding LVC sector. VISX does have strong fundamentals,
but most importantly, the dominant market share.

Be warned, the earnings report is due April 14th and we 
never recommend holding over earnings.  It's too risky -
so take your profits and run!  VISX confirmed on Friday 
they'll announce after the bell. 

BUY CALL MAY-130 VSQ-EF OI=127 at $19.25 SL=15.00
BUY CALL MAY-135*VFS-EG OI=  0 at $16.75 SL=13.00 Vol=163
 the F in the 135 is not a mistake
BUY CALL JUN-130 VSQ-FF OI= 65 at $22.88 SL=17.75

Picked on April 2nd at $113.50   PE = 0
Change since picked     +23.66   52 week low =$12.25
Analysts Ratings     3-2-1-0-0   52 week high=$141.50
Last earnings  12/98 est= .35   actual= .36 surprise= 2.86%
Next earnings  04-14 est= .53   versus= .23
Average daily volume = 677.7K
Chart = http://quote.com/q?s=VISX&d=3m

*************

JNJ - Johnson & Johnson $98.00 (+3.88) 

Johnson & Johnson is one of the world's largest and most 
diversified health care product makers. The company 
operates in three sectors: consumer products (with brands 
like Tylenol and Motrin analgesics, Reach toothbrushes, 
Band-Aid bandages), professional products (AcuVue contact 
lenses, surgical instruments, joint replacements), and 
pharmaceuticals including Ergamisol cancer treatment, 
Hismanal antihistamine, and Ortho-Novum oral 
contraceptives). JNJ expands its product line through 
acquisitions (it has made more than 30 this decade) and 
partnerships with smaller firms (they provide the 
technology; JNJ provides the marketing muscle). 
(from Hoovers Online)
 
JNJ has a beautiful up-trending chart pattern.  JNJ reached 
a new 52-week high on Friday and closed right on its high of 
the day.  Earnings are scheduled for the 26th of April and 
we feel the strong economy will benefit JNJ's earnings.   
Make sure to watch for a bit of profit taking after reaching 
new highs.  

JNJ's last split was in June of 1996 in the $100 range. The 
problem is that they don't have enough shares and the share- 
holder meeting on the 22nd of April doesn't have a vote on 
additional shares listed in the proxy.  But, we all know how 
easy it is for management to put a vote to shareholders, so 
JNJ will be added to our Split Candidate list. With earnings 
only 2 weeks away, we see no reason why the run should stop.
 
BUY CALL MAY- 95 JNJ-ES OI=1569 at $5.50 SL=4.00 ITM $3.00 
BUY CALL MAY-100*JNJ-ET OI=3208 at $2.75 SL=1.50 
BUY CALL JUL- 95 JNJ-GS OI=2414 at $7.75 SL=6.00 ITM $3.00
BUY CALL JUL-100 JNJ-GT OI=1480 at $4.13 SL=2.75

Picked on April 8th at $97.25   PE = 42
Change since picked     +0.75   52 week low =$67.06
Analysts Ratings    1-4-0-0-0   52 week high=$98.00
Last earnings 01/99  est= .51   actual= .50
Next earnings 04-26  est= .80   versus= .73
Average daily volume = 2.20 mln
Chart = http://quote.yahoo.com/q?s=JNJ&d=3m



*****************************

PLAYS CONTINUED IN SECTION FOUR.

*****************************
SEE DISCLAIMER IN SECTION ONE
*****************************


The Option Investor Newsletter             4-11-99
Sunday                4  of  6

*************
Bandwidth-Semiconductors
*************

UNPH - Uniphase Corp. $129.75 (+8.19)(+14.63)(P3W +12.44)

Uniphase Corporation is a fully integrated optical 
electronics company that designs, develops, manufactures 
and markets fiber optic telecommunications components and 
modules and laser subsystems. The Company's 
telecommunications products include semiconductor lasers, 
high-speed external modulators, transmitters, fiber Bragg 
gratings and optical modules for fiber optic networks in 
the telecommunications and cable television industries.  
Based in the Silicon Valley, California, they employ 
approximately 1200 people worldwide.  Their merger with 
Canadian based JDS Fitel should be complete by mid-June, 
pending SEC approval and proxy vote.  Simply stated, JDS 
Uniphase will manage and develop optical signals in 
fiberoptic networks.  American Express owns 10% of the 
common shares

"Dear God, please let there be one more company like Intel 
to invest in, and I promise not to mess it up this time".  
Here's your big break.  UNPH makes the laser modules and 
pumps (in addition to other components) that split a fiber 
optic strand into many different, potentially unlimited 
channels.  Effectively they are to the growth of fiber 
optic bandwidth what Intel was to the growth of the PC, and 
have been convincingly labeled as such, by George Gilder, 
Forbes Magazine Contributor and bandwidth guru.  Revenues 
are growing 40% and the company is finally profitable, with 
earnings expected to grow at the same rate.  Long and 
short-term technical charts can't look much better than 
this.  All indicators or strongly positive.  Average daily 
volume rose some compared to the previous week, indicating 
continued buying interest.  Did we mention an earnings run 
into April 26's report?  They report after the close 
(company confirmed).  A split too?  Very possible since 
their last one occurred November 1997 at $70.  They'll need 
shareholder approval though, since there aren't currently 
enough shares.  Confirm market direction first before 
playing.

No news this week other than an SEC filing confirms 
American Express owns 10% of the company.  Earnings and the 
possible split announcement are driving the short-term 
price.

*** Caution, these are thinly traded!

BUY CALL MAY-125 UQD-EE OI=237 at $15.00 SL=11.75
BUY CALL MAY-130*UQD-EF OI=971 at $12.75 SL=10.25
BUY CALL MAY-135 UQD-EG OI= 11 at $10.13 SL= 7.50
BUY CALL JUN-130 UQD-FF OI= 35 at $14.88 SL=14.88
BUY CALL JUN-135 UQD-FG OI=  3 at $12.50 SL=10.00


Picked on April 6 at $125.88    PE = n/a
Change since picked    +3.87    52 week low =$ 31.25
Analysts Ratings   4-9-0-0-0    52 week high=$135.50
Last earnings  01/98 est .26    actual .27
Next earnings  04-26 est .32    versus .23
Average Daily Volume = 858 K
Chart = http://quote.yahoo.com/q?s=UNPH&d=3m

*************

LVLT - Level3 Communications, Inc $84.75 (+12.50)

Level3 Communications is a telecommunications and information 
service company that is building an international fiber-optic 
network.  The technology is based on internet protocol.  They 
provide local, long-distance, and internet service over leased 
networks in 15 cities in the US and 2 in Europe.  

The bullish environment and mighty technology sector have 
helped fuel this company's consistent uptrend over the past 
months.  But the 17% jump this week may be driven by the 
expected earnings results. LVLT caught our attention at the 
beginning of the week when it spiked up over 8 points.  The 
stock did pull back a little on Wednesday offering a good 
entry point.  But after that, we got assurance regarding its 
direction.  The stock shot up again and on Friday LVLT set 
another new high at $85 on moderate volume.  The charts and 
other technicals are still supportive of upward movement, 
but as always, put your stops in place. 

Even though this stock has been on a lengthy uptrend, you may 
want to consider the upcoming earnings report as part of the 
overall picture.  Level3 confirmed on Friday they will report 
on April 23rd before the bell and have a conference call at 
11:00 EST.  It is our general consensus not to hold over an 
earnings announcement; so keep this in mind if you're in the 
game.  In the industry, Williams Communication Group (WCG) 
had a 750 mln IPO on Friday.  They will use the proceeds to 
lay 32,000 route miles of fiber-optic lines to connect 125 US 
cities by the end of 2000.

BUY CALL MAY-80 QHN-EP OI=274 at $ 9.23 SL=7.00 
BUY CALL MAY-85*QHN-EQ OI= 71 at $ 6.38 SL=4.75
BUY CALL MAY-90 QHN-ER OI= 29 at $ 4.38 SL=2.75
BUY CALL JUN-90 QHN-FR OI= 49 at $ 6.25 SL=4.50

Picked on April 6th at  $81.19     PE = 29
Change since picked      +3.56     52 week low =$22.37
Analysts Ratings     1-4-0-0-0     52 week high=$85.00
Last earnings 12/98 est= -.28   actual= -.11 surprise= 60.71%
Next earnings 04-23 est= -.44   versus= -.02
Average daily volume = 1.47 mln
Chart = http://quote.com/q?s=LVLT&d=3m

*************

MFNX - Metromedia Fiber Netwk. $67.38 (+12.63)(P3W +8.25)

You want bandwidth?  We got your bandwidth right here! How 
about 380,000-miles of dedicated fiber-optic network?  We 
got you covered in New York City metro area (including 
parts of Jersey), Chicago, Philly and Washington, DC too.  
Our lease arrangements with communications carriers, 
including local-exchange carriers; long-distance, paging, 
cellular, PCS, and cable companies let us save our Internet 
service providers, and corporate and government customers 
lots of money when they access our network.  We're 
expanding our US-to-UK services through a joint venture 
with Racal Telecom.  Our chairman and CEO Stephen Garofalo 
owns about 30% of the stock, so you know we aren't going 
anywhere.  Meter's runnin' buddy, what'll it be?

March 18, Sands Brothers issued a "strong buy" rating based 
on strong operations, unique strategic position and another 
4Q "earnings blowout".  No, they are not profitable, but 
they barely broke even ($0.00 earnings) last quarter which 
beat expectations by $0.01(!).  Geometric revenue growth is 
expected thanks to the bandwidth explosion taking place in 
the telco industry.  It's a bit early to get excited about 
earnings, which won't be announced until May 17 (First 
Call).  But a split never hurts!  April 1, MFNX filed with 
the SEC to increases its stock authorization from 200 mln. 
shares to (get this) 2.68 bln. shares (with a "b") at a 
shareholders' meeting scheduled May 18.  It makes sense to 
us that they would report earnings then too.  Since going 
public in October 1997, they have announced two 2:1 splits.  
Each split occurred at about $60-$70 range.  We're there 
now.  Trading about 700 K shares daily, any volume gooses 
the price since there are only 17 mln. shares in float.  
The technical chart is flexing its MACD muscle too - really 
strong.  Options are thinly traded so use limit orders to 
buy in.  Confirm market direction, then enjoy the ride.

News is incorporated above.

***Caution-these are thinly traded and expensive

BUY CALL MAY-60 QFN-EL OI=4031 at $11.13 SL= 8.75
BUY CALL MAY-65 QFN-EM OI=  33 at $ 7.88 SL= 6.00
BUY CALL MAY-70*QFN-EN OI=  68 at $ 5.38 SL= 3.50
BUY CALL AUG-70 QFN-HN OI=  11 at $10.38 SL= 8.00

Picked on April 11 at $67.38    PE = 6800 (really!)
Change since picked    +0.00    52 week low =$ 6.38
Analysts Ratings   3-1-0-0-0    52 week high=$70.50
Last earnings 03/98 est -.01    actual 0.00
Next earnings 05-17 est -.17    versus -.05
Average Daily Volume = 698 K
Chart = http://quote.yahoo.com/q?s=MFNX&d=3m

*************

QWST - Qwest Communications International Inc. $89.00 (+14.50) 

The Colorado based Qwest Communications International is the
fifth largest local and long distance telephone company in 
the United States.  It is also secures broadband 
Internet-based data and provides voice and image 
communication capabilities to businesses and consumers.  
It is currently expanding its reach into Mexico and most of
Europe. In the US, QWST is building its Internet 
Protocol-based fiber-optic network which will connect 
over 130 cities by mid 1999.

QWST is on a mission to provide "direct, local connections 
for its customers using its long distance communications 
network." (-Reuters)  This past Wednesday QWST signed a $15 
million deal with Rhythms NetConnections.  The agreement will 
give QWST high speed data connections in 31 major metropolitan 
markets.  This move adds to some of Qwest's recent announcements 
that detail the company's plans to offer high speed local 
connections in more that 35 markets.  This means they will 
soon be reaching 50% of U.S. businesses.  The news sparked 
QWST to head to an all time high of $89.38.  We see the break-out 
continuing and are now adding QWST as a call.  Earnings for 
the company aren't until April 29th (First Call).  However,
at this level, QWST qualifies as a split candidate (even
though they only have enough for a 3:2).  They are likey
to have their annunal shareholder meeting in the first 
two weeks of May.

News:  There is rumor that QWST could takeover the undervalued 
e.spire Communications Inc., a local telephone carrier.   

BUY CALL MAY-85 QWA-EQ OI=1179 at $ 9.75 SL= 7.50
BUY CALL MAY-90*QWA-ER OI= 562 at $ 7.13 SL= 5.25
BUY CALL JUL-90 QWA-GR OI= 156 at $11.25 SL= 8.75
 
Picked on April 11th at $89.00     PE = N/A
Change since picked     +$0.00     52 week low =$22.00
Analysts Ratings    5-10-4-0-0     52 week high=$89.38
Last earnings 12/98 est 0.02   actual  0.03 
Next earnings 04-29 est 0.00   versus -0.02
Average Daily Volume = 3.29 mln
Chart = http://quote.yahoo.com/q?s=QWST&d=3m

*************

BRCM - Broadcom Corp. $74.00 (+8.25)

Go where computers and televisions converge, and you'll find 
the two Henrys.  Broadcom, founded by Henry Nicholas (co-
chairman, president, and CEO) and Henry Samueli (co-chairman, 
VP, and chief technical officer), makes semiconductors used 
in broadband (high-speed) data and video transmission products. 
The company controls the market for cable modems and digital 
set-top boxes.  Its chips are also used in products for 
Ethernet networking, digital broadcast satellite, and digital 
subscriber line markets.  Its customers include General 
Instrument and 3Com, which account for 32% and 15% of sales, 
respectively.  

BRCM has recently broke through resistance in the $69 range.
This opens the door for more gains.  BRCM is still over $20
from its 52-week high.  Earnings are in a few weeks and BRCM
has historically beat estimates.  This should give us a nice
earnings run.  BRCM did close on Friday at its high for the
day which could keep the stock up on Monday.  BRCM's last
earnings saw the stock shoot up strongly a few days before
the announcement.

BRCM historically has sold most their product through General
Instruments and 3Com, but they announced this weekend that 
they will be selling product through Insight, a distributor
of electronic products.  BRCM hopes to realize 10% revenues
from distribution within 3 years.

BUY CALL MAY-70 RCQ-EN OI=605 at $10.13 SL=7.75 ITM $4.00 
BUY CALL MAY-75*RCQ-EO OI=924 at $ 7.50 SL=5.00 
BUY CALL MAY-80 RCQ-EP OI=388 at $ 5.75 SL=4.25
BUY CALL AUG-80 RCQ-HP OI=407 at $11.75 SL=9.25
BUY CALL AUG-85 RCQ-HQ OI=507 at $10.00 SL=7.75

Picked on April 10th at $74.00   PE = 151
Change since picked      +0.00   52 week low =$12.00
Analysts Ratings     3-5-1-0-0   52 week high=$95.63
Last earnings 01/99   est= .10   actual= .13
Next earnings 04-22   est= .14   versus= .09
Average daily volume = 1.58 mln
Chart = http://quote.yahoo.com/q?s=BRCM&d=3m

*************

JBL - Jabil Circuit, Inc $49.13 (+8.44)

Jabil Circuit is the #3 US manufacturer of circuit board 
assemblies, only behind Solectron and SCI Systems.  The 
company also has operations in Italy, Malaysia, Mexico, and 
the UK. JBL's products are combinations of semi-conductors,
transistors, and diodes.  50% of its sales revenue is 
derived from telecommunication companies like Cisco and 3Com,
but other uses are in computers and its peripherals, network 
hardware, and cars. 

JBL rallied with the broader tech sector on Monday and rose 
9.2% to tack on +3.75.  This spike pushed the stock through 
its overhead resistance at $41-42 and bounced it over the 
10 dma at around $43-44.  Then all week long JBL never 
strayed off course and just keep adding on a little bit 
more everyday.  There also were no intraday moves to 
indicate a return to its old support at $38-39.  

The stock has been in a slow uptrend since its 2:1 split in 
February, but its takeoff on Monday seems to be directly 
related to analyst recognition.  MSDW analyst, Shelby Fleck, 
had initiated coverage on the stock with an "outperform" and 
then cited significant reasoning.  She believes EPS growth 
is ready to accelerate due to the following factors:  an 
excellent existing customer base, incremental revenues from 
acquisitions, and 2 new potentially substantial outsourcing
programs which could easily increase sales up to 10% over 
time.  Conservative players may want to watch for a pullback 
and then wait for confirmation before initiating a new play.

BUY CALL MAY-45 JBL-EI OI= 129 at $ 6.63 SL=5.00
BUY CALL MAY-50 JBL-EJ OI= 237 at $ 3.88 SL=2.50
BUY CALL MAY-55*JBL-EK OI=2003 at $ 1.81 SL=1.00
BUY CALL JUN-40 JBL-FH OI= 750 at $11.38 SL=9.00
BUY CALL JUN-45 JBL-FI OI= 186 at $ 7.88 SL=6.25

Picked on April 11th at $49.13   PE = 64
Change since picked      +0.00   52 week low =$11.50
Analysts Ratings    8-12-2-0-0   52 week high=$49.50
Last earnings 02/99 est= .26  actual= .28 surprise= 7.69%
Next earnings 06-14 est= .29  versus= .23
Average daily volume = 917.9K
Chart = http://quote.com/q?s=JBL&d=3m


*************
Retail  
*************

WMT  Wal-Mart $102.75 (+9.50)(P9W+9.25)

Wal-Mart is the leading discount retailer in the world, with 
a presence in all 50 states, as well as Canada, Mexico, Asia,
Latin America, and Europe. In addition to discount department
stores, it operates the #2 grocery chain, behind Kroger's, 
and Sam's clubs, which is the #2 warehouse chain. This retail 
giant's market capitalization is $182.3 billion.

On 3-4, WMT announced a 2-for-1 stock split, a 29% increase in 
its dividend, and an expansion in its share repurchase program 
by $1.2 billion to $2 billion. What more could investors ask 
for? After an outstanding fourth quarter, Wal-Mart is continuing 
with strong numbers in the current quarter, too. February net 
sales were up 17.7% year over year. And same store sales 
increased 10.3% over last year. March sales were released this 
week and they look even better, although an early Easter helped 
the retailers. Same store sales increased 11.3% while total sales 
were up 18.3%. The Retail King seems unstoppable!

Following the release of March sales numbers, Wal-Mart broke 
through previous resistance to set a new high on Thursday. On 
Friday it set another new high of $103.44 before closing at 
$102.75. Volume has really picked up as WMT heads toward its 
split on April 19th. We expect another strong week for WMT.  

BUY CALL MAY-100 WMT-ET OI=2862 at $7.63 SL=6.00
BUY CALL MAY-105*WMT-EA OI=   0 at $5.25 SL=3.25 vol=1838 Friday
BUY CALL JUN-105 WMT-FA OI=1328 at $7.25 SL=5.50
BUY CALL JUN-110 WMT-FB OI= 722 at $5.00 SL=3.25

Picked on Jan 26th at $83.56       PE = 49  
Change since picked  +$19.19       52 week low =$ 48.19
Analysts' ratings 7-10-5-0-0       52 week high=$103.44
Last earnings 12/98 est 0.66   actual 0.70  
Next earnings 05-12 est 0.43   versus 0.37
Average daily volume = 3.38 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m


*****

AEOSD - American Eagle Outfitters, Inc $80.00 (+6.62)(+4.19)

American Eagle Outfitters is a casual apparel retailer for 
men and women.  All of its products bear its private-label 
brand name.  The company operates 350 mall stores in 39 
states primarily east of the Rockies.

AEOSD has been setting new highs all week in the excitement 
of its 2:1 split scheduled for May 3rd, but on relatively 
low volume.  Finally, the bounce on strong volume that we 
were looking for came on Friday. The stock traded over 450K 
shares advancing +2.63.  It also peaked at $80.50 during 
trading setting the newest 52-week high. The technical charts 
are all positive; and now that we've had some show of volume 
strength, there's no other resistance giving opposition for 
AEOSD to reach new heights during this split run.

Take note: a big change came on Thursday for the stock. The 
American Eagle Outfitters' symbol had been changed on the 
NASDAQ to AEOSD. 

***be sure to check with your broker about the option
symbols...most quote services have been having trouble
with this one!

BUY CALL MAY-75 AQU-EO OI=1392 at $ 8.00 SL= 6.25
BUY CALL MAY-80*AQU-EP OI= 308 at $ 5.63 SL= 4.00
BUY CALL AUG-80 AQU-HP OI= 446 at $11.50 SL= 9.25

Picked on April 2nd at  $73.38   PE = 31
Change since picked      +6.62   52 week low =$27.37
Analysts Ratings     4-4-0-0-0   52 week high=$80.50
Last earnings on 1/99 est= .95   actual= 1.03   surprise= 8.42%
Next earnings on 5-31 est= .32   versus= .24
Average daily volume = 352.3K
Chart = http://quote.com/q?s=aeosd&d=3m



*****************
PUTS, PUTS, PUTS
*****************
Put plays can be very profitable but have a larger risk than
call plays. When a stock is falling the entire investment
community (except the shorts) is hoping it will reverse and
start back up. The company management is also doing everything
they can to shore up their stock price. The company issues
press releases, brokers talk it up, analysts try to put a
positive spin on everything. Then of course there is the death
knell, the "buy recommendation" simply because the price has
dropped to some level that analysts feel attractive again. 
Buyers who like the stock wait until it appears a bottom has
been reached and then jump on it in a feeding frenzy. They may
already have a large position and are averaging down. Many
factors can stop a free falling stock in mid drop.

****************
Recommended Puts 
****************

LTR - Loews Corp. $73.00 (-2.75)(-5.94)

Loews Corporation primarily operates in property, casualty 
and life insurance through its 84% owned subsidiary CNA 
Financial Corporation. The company is also involved in the 
production and sale of cigarettes through Lorillard Inc. 
Other businesses include the operation of oil and gas 
drilling rigs, the operation of hotels and the distribution 
and sale of watches and other timing devices. (from Stock 
SmartPro)

LTR continued to drop this last week.  There isn't any news 
to report, but there is the continued worry over tobacco 
lawsuits.  The volume over the last week has been above 
average, which continues to show a bearish bias.  LTR is at 
its 52-week low, so there isn't any artificial support 
lines.  Watch for good entry points by target shooting.

BUY PUT MAY-70 LTR-QN OI= 77 at $2.69 SL=1.25
BUY PUT JUN-70*LTR-RN OI=535 at $3.00 SL=1.50

Average Daily Volume = 296.2 K
Chart = http://quote.yahoo.com/q?s=LTR&d=3m

*****

LHSG - LHS Group $27.75 (-2.00)(-6.13)(-1.83)(P7W -9.25)

LHSG is a telephone billing and customer service software 
and solutions provider.  They help telecoms manage their 
daily operations and billing, while handling multiple 
languages and currencies in over 50 countries.

No sooner had we published Thursday's update than Lehman 
Bros. downgraded the company from buy to neutral.  The 
markets lack of confidence is spreading, as some analysts 
suspect that earnings will bring forth more cockroaches.  
Careful.  Volume was 3 times normal on Friday, while LHSG 
lost only $0.12.  We think smart money may be buying, or 
dumb money is behaving appropriately.  The fact is earnings 
are scheduled for release April 21, after the close.  Even 
a poorly performing company may experience support, or even 
a rise on investor's hope of a positive surprise.  Don't 
count on it though.  Just in case, keep stops in place if 
good news should hit the wires.  Confirm market direction 
before playing.

Although we don't know what he did for the company since 
his title isn't listed in the SEC 8-K document (unscheduled 
material change) filed Thursday, a Dr. Wolf J. Gaede 
appears to have abruptly terminated his position with the 
company.  We don't know why either, but we suspect another 
cockroach abandoning a sinking ship.

BUY PUT MAY-30*QLH-QF OI=2422 at $4.75 SL=3.00
BUY PUT MAY-25 QLH-QE OI= 716 at $2.00 SL=1.00

Next earnings on 4-21 est=.14 versus=.09
Average daily volume = 181 K
Chart = http://quote.yahoo.com/q?s=LHSG&d=3m


*****

BGEN - Biogen, Inc. $114.44 (+.94)

AVONEX calling! Not a peddler of cosmetics, Biogen researches, 
develops, and markets biopharmaceuticals to treat a variety 
of ailments; about 55% of total sales are from AVONEX, a 
drug used to treat relapsing multiple sclerosis.  The company 
is developing a number of drugs to treat inflammation, 
pulmonary diseases, kidney diseases and disorders, and central
nervous system disorders.  Biogen also makes money by licensing 
drugs it has developed to other companies; such products include 
alpha interferon and a hepatitis B vaccine.  Biogen has research 
agreements with such pharmaceutical firms as Creative BioMolecules, 
CV Therapeutics, and Merck.  The company's products are sold 
around the world. 

BGEN announced earnings on Thursday that met estimates.  In 
the next 24 hours two brokerage firms downgraded the stock.  
BGEN has a PE ratio in the mid 60's, which is extremely high
for a biomedical company.  BGEN fell Friday on very heavy volume,
another very bearish sign.  There could be a dead cat bounce
on Monday, but we feel the stock is in for a short term 
correction.

BUY PUT MAY-115*BGQ-QC OI=729 at $7.13 SL=5.00
BUY PUT MAY-110 BGQ-QB OI= 43 at $4.75 SL=3.25

Average daily volume = 1.35 mln
Chart = http://quote.yahoo.com/q?s=BGEN&d=3m

********

GM - General Motors Corp. $85.63 (+0.19)

General Motors is the world's number one vehicle manufacturer 
with more than 100 facilities worldwide.  Buick, Cadillac, 
Chevrolet, GMC, Oldsmobile, Pontiac, and Saturn are all brands 
of cars and trucks in the GM genre.  GM also produces cars for 
foreign companies like Holden, Opel, Isuzu, and Saab.  GM owns 
over 80% of Delphi Automotive systems, the world's number one 
maker of auto parts.  GM even has a subsidiary named Hughes 
Electronics which makes communications networks.  

GM is on our put list.  While the rest of the automotive sector 
managed to set monthly and quarterly records, GM reported 
disappointing March auto sales.  Even though many Americans 
are buying vehicles because of the low interest rates, GM's 
light vehicle and truck sales dropped 2.2% and 5.8% 
respectively.  Analysts had been projecting 3% gains so these 
numbers were much lower than previously expected.  GM blamed 
tough competition, generous incentives from other companies, 
and railroad shipping problems from manufacturing plants in 
Canada.  Whatever their reasons, earnings reports due out at 
6 am on Thursday April 15th.   With the other car companies 
doing so well, we feel that investors could bail out of 
General Motors.  GM currently has dropped below every major 
moving average including the 15, 30, and 50 dma.  Its weak 
technicals combined with likely earnings disappointments 
make GM a prime put candidate.

BUY PUT MAY-85*GM-QQ OI=510 at $4.13 SL=2.50
BUY PUT MAY-80 GM-QP OI=243 at $2.00 SL=1.00  

Average Daily Volume = 2.69 mln 
Chart = http://quote.yahoo.com/q?s=GM&d=3m

********

RMBS - Rambus Inc. $71.94 (+5.94)

Rambus Inc. develops and licenses high-performance chip-to-chip
interface technology that enables semiconductor memory devices 
to keep pace with faster generations of processors and 
controllers.  Rambus deals mainly with the multimedia, 
networking equipment, and digital TV markets.  Rambus earns 
royalties from semiconductor makers, including NEC, Samsung, 
and Intel when they use Rambus-based products. 

Even though RMBS finished the week up +$5.94, we are adding 
RMBS as a put play.   We tend to think that Rambus' downhill 
performance in the later part of the week could continue well 
into this week.  The company reports its earnings on Monday 
April 12th*.  With weaker than expected personal computer 
demands, we feel that there is a good chance RMBS will report 
a shortfall in earnings.  Add to that the fact that Intel will 
report their numbers on Tuesday April 13th.  That could be an 
unlucky day for this giant chip maker as well.  We believe 
they too could report weaker statistics.  RMBS could fall 
further in sympathy.    

*an earnings date was tough to nail down for RMBS.  We found
dates from 4/12 (Mon) to 4/13 and 4/14.  We were unable to 
reach the company.  No matter, we doubt earnings will help, 
but play with stops anyway.

News:  Rumor has it that Intel may be looking for alternatives 
to the Rambus chip.  Three years ago Rambus promised to boost 
PC memory performance with better chips designs.  They haven't 
been making the headway as fast as projected and some of their 
customers are getting a little angry.  

BUY PUT MAY-70*BNQ-QN OI=1314 at $6.88 SL=5.25
BUY PUT MAY-65 BNQ-QM OI= 775 at $4.50 SL=2.75

Average Daily Volume = 1.10 mln 
Chart = http://quote.yahoo.com/q?s=RMBS&d=3m

********

PPG - PPG Industries, Inc $48.06 (-1.88)

PPG Industries manufactures decorative and protective 
coatings, glass products, and also specialty chemicals.  
You may be familiar with their Lucite brand house paint or 
Olympic stains.  Coatings for architectural, automotive, 
and industrial uses account for 50% of the company's revenue.  
PPG has 75 manufacturing facilities in 16 countries.

PPG has been in a downtrend all year on concerns over 1999 
company earnings.  Well the time is drawing near - April 15th 
is the expected report date.  And it's anticipated that EPS 
for 1Q may come in at .80 vs 1.07 - a negative 25% from last 
year's 1Q. On Friday PPG spiked down -2.06 to push it even 
farther below its 200 dma at $56-57.  This is a very bearish 
signal and perhaps indicating further descent over the next 
few trade days.  In the news, PPG announced on Friday they 
agreed to acquire German-based, Imperial Chemical Industries.  
Details were sketchy, but they stated no fixed assets were 
involved.  Confirm the market sentiment before beginning a 
new position and use stops to protect your position.

BUY PUT MAY-50 PPG-QJ OI= 81 at $3.88 SL=2.50
BUY PUT MAY-55*PPG-QK OI=261 at $7.63 SL=5.75

Chart = http://quote.com/q?sPPG&d=3m

*******

HWP - Hewlett Packard $69.63 (-1.75)

Hewlett Packard is best known as the #2 worldwide provider 
of computers, peripherals, and computer related services 
standing only behind the "Big Blue".  Almost 85% of sales 
revenue is derived from this aspect of the business. But HWP 
also makes testing and measurement equipment and medical 
equipment products which it plans on developing and combining 
into a separate company. 

On Friday evening, Compaq Computers, a fierce rival of HWP, 
confirmed the whispers on the Street that they would indeed 
fall short of 1Q forecasts.  Not only did they finally 
validate analysts worst fears, but horrified them with the 
projected numbers. The major PC maker said EPS would be 
.15 vs .31 - less than half of what WallStreet expected! 
Initially, this will reverberate through all the tech 
stocks and should knock down share prices.  Analysts are 
fearful that HWP might be next to announce.

Merrill Lynch analyst, Steve Milunovich, predicted last 
Wednesday that 2Q earnings for the stock may be soft even 
though the company has slashed prices to keep in line with 
the competition. Earnings for Hewlett Packard are due May 17th.

BUY PUT MAY-65 HWP-QM OI=5518 at $1.94 SL=1.00
BUY PUT MAY-70*HWP-QN OI=2387 at $4.00 SL=2.50

Chart = http://quote.com/q?sHWP&d=3m




******************************
SEE DISCLAIMER IN SECTION ONE
******************************



The Option Investor Newsletter            4-11-99
Sunday                5  of  6

******************************************************************
Combos      
******************************************************************
The Tax-man (Uncle Sam) cashes in this week...-

Friday, April 9

U.S. stocks were mixed Friday as the leading issues consolidated
and fund managers trimmed portfolios after a record-setting week.
The Dow ended 23 points lower at 10173. The Nasdaq index moved 19
points higher to 2593, another record. The S&P 500 index also set
a new high at 1348. In the broader market, advancing issues led
declines 16 to 12 on moderate volume of 712 million shares on the
New York Stock Exchange.

New plays (positions/prices):

KLAC  JUN55C/APR55C  $4.25  debit (lots of movement - easy entry)
MER   MAY90C/MAY95C  $3.12  debit (priced near the open)
MER   LJAN100/A100C  $12.75 debit (LEAP was cheaper at $14.38)

Portfolio plays:

IDTC was our big gainer on Friday but once again, we were forced
out of the play at the open. The stock gapped-up $4 and the debit
spreads were gone by the time options started trading. The same
situation occured on Wednesday with the CBS play. It is very
disappointing to be one-day-late twice in one week. Most of the
call option speculators (that create our disparities) actually
made money on those plays.

The Spreads/Combos portfolio is performing fairly well this month
and most of our April positions will close with a profit. Next
week, we will be rolling the long-term positions forward to May.

Plays that we are watching closely include:

DELL (CPQ earnings warning)
EGGS (to finish below $20)
CIEN (falling into the teens)
COOL and PRD (both sliding - unload the long positions on Monday?)

Of course, we have also had some great performers recently (BPA,
BR, ESPI, FORE, PROX, REV, SUNW, UNPH, TWX, WMT, XCIT & ZD), and
next week we will post the monthly summary.

Good Luck!
******************************************************************
				- NEW PLAYS -
******************************************************************
UK - Union Carbide  $48.06     *** Volatility Play ***

Union Carbide leads the world in producing ethylene oxide and
ethylene glycol (used to make antifreeze and polyester fibers)
through its basic chemicals and polymers segment. Its specialty
and intermediary chemicals segment is a leading manufacturer of
polyethylene (the most widely used plastic in the world); they
also make solvents, coatings, latex, resins, emulsions, and other
materials. Union Carbide is going ahead with a joint venture with
Malaysia's state-owned oil and gas company, Petronas, to build
a $2 billion petrochemical complex in that country. The plant
will produce ethylene oxide and propylene derivatives.

Union Carbide shares fell on Friday after an analyst downgraded
the stock and hopes of a possible takeover faded. The research
note said there wasn't much hope of a buyout in the near future
and it also encouraged owners of UK to take profits.

In the options pits, implied volatility options rose again on
Friday even as the stock fell. Takeover speculation has been in
the market for months and it heated up in the last few sessions,
sparking a flurry of call buying. The street thinks the stock
is overvalued but the options market indicates there's going to
be a takeover or some other type of merger. Most of the volume
was in the April 50 calls, and that's where we will start our
speculation play. There are two positions offered, depending on
your opinion about the possibility of a merger, and both have
favorable disparities.

PLAY (bullish/time spread):

BUY  CALL JUL-50 UK-GJ OI=843  A=$3.75
SELL CALL APR-50 UK-DJ OI=5140 B=$1.00
INITIAL NET DEBIT TARGET=$2.50 TARGET ROI=50%

Note: Plan to sell a May call option
      after the April position expires.

PLAY (bearish/time spread):

BUY  CALL MAY-45 UK-EI OI=1343 A=$5.12
SELL CALL APR-45 UK-DI OI=6058 B=$3.62
INITIAL NET DEBIT TARGET=$1.25 TARGET ROI=20%

Chart = http://quote.yahoo.com/q?s=UK&d=3m
******************************************************************
INTU - Intuit Inc. $106.06   *** Tax Time! ***

Intuit is the #1 maker of personal finance software. Their small
business accounting and tax software accounts for about half of
sales, but Intuit also makes the Quicken personal finance and
TurboTax tax filing applications. The Internet has created a
simplified opportunity for finance transaction processing, and
Intuit has jumped on the bandwidth wagon. The company offers
Internet products and services such as a financial news site;
Quicken.com, and payroll processing, insurance marketing, and
mortgage filing. Intuit sells via retailers/resellers and 15% of
its sales come from distributor Ingram Micro.

With one week left to go until the big tax day, Intuit says they
are achieving record sales of the TurboTax® software program. The
number of returns prepared through WebTurboTax.com, the leading
Web-based tax preparation service, is already 13 times the total
usage of its Web-based offering last tax season. TurboTax is #1
and the new internet service is experiencing a roaring success.

Technically, the recent break-out above previous highs near $95
should provide the boost that's needed to maintain a new trading
range in the triple digits.

PLAY (conservative/debit spread):

BUY  CALL MAY-85 IQU-EQ OI=2  A=$23.50
SELL CALL MAY-95 IQU-ES OI=63 B=$15.50
INITIAL NET DEBIT TARGET=$7.75 ROI(max)=29% B/E=92.75

Chart = http://quote.yahoo.com/q?s=INTU&d=3m
******************************************************************
CDO - Comdisco  $22.75     *** Along For The Ride ***

Comdisco supplies equipment leasing with information technology,
medical products such as MRI systems and CT scanners, and
semiconductor production and test equipment. They provide asset
management, network maintenance, and continuity services. It is
selling its original business, mainframe leasing, because of
declining prices.

Comdisco stock moved higher last week along with the gains in two
start-up companies that offer digital subscriber lines similar to
that of a Comdisco subsidiary. The new interest exists because of
share values for companies like Covad Communications and Rhythms
NetConnections, which have large market capitalizations but poor
revenues and significant operating losses.

The option players were also in on the trend, forcing the implied
volatility higher last week. Some of the activity is institution
based and other call buyers are apparently rolling up, expecting
the stock to move higher.

PLAY (speculative/debit spread):

BUY  CALL MAY-17.50 CDO-EW OI=429 A=$6.38
SELL CALL MAY-20.00 CDO-ED OI=188 B=$4.62
INITIAL NET DEBIT TARGET=$1.50 ROI(max)=66% B/E=$19.00

Chart = http://quote.yahoo.com/q?s=CDO&d=3m
******************************************************************
CNCX - Concentric Network  $95.00     *** A Real Internet Play ***

Concentric offers Internet and networking services including Web
hosting, local Internet access, telephony/videoconferencing, and
virtual private networks. Its customers include corporations such
as WebTV Networks, AT&T, and 3Com along with consumers and small
businesses. The company has teamed with Telecom Italia to offer
the MondoNet global Internet protocol-based network.

Concentric Network has recently been recognized as the top Web
hosting company on the Internet and they are working diligently
to maintain that status. The company's goal is to ensure their
hosting services can provide businesses who need a Web presence
everything from entry level Web hosting to a smooth transition to
very large and complex sites. Their main product; ConcentricHost,
is a state-of-the-art, fault tolerant server cluster, with high
performance technology, superior flexibility and reliability.
Their ISP; ConcentricWireless, is a wireless high-speed Internet
access service using a Multipoint Microwave Distribution System
instead of telephone wires or cable, to deliver fast Internet
access with a combination of cost-effectiveness and reliability.

This play is one of the most conservative Internet positions that
I have offered...(but beware Murphy's law!)

PLAY (conservative/debit spread):

BUY  CALL MAY-65 QFX-EM OI=51 A=$34.12
SELL CALL MAY-70 QFX-EN OI=48 B=$30.12
INITIAL NET DEBIT TARGET=$3.87 ROI(max)=28%

Note: No "legging-in" on this one please...

Chart = http://quote.yahoo.com/q?s=CNCX&d=3m
******************************************************************
MI - Marshall Industries  $16.50     *** Cheap Speculation! ***

Marshall Industries is a leading distributor of electronic and
industrial components. With subsidiary Sterling Electronics, MI
distributes more than 200,000 different products. MI's Web site
and intranets connect suppliers, customers, and the distribution
operation, allowing the company to offer a wide range of customer
services, including ordering and order tracking.

Marshall's stock price jumped again on Friday but the company is
unable to explain the rise. Shares closed $2 higher on ten times
the average daily volume. One analyst suggested investors were
focusing on the company's Internet operations, which include a
Web site where customers and suppliers can obtain technical data
sheets, conduct real-time ordering of products and participate
in live interactive training sessions and product seminars. The
analyst had previously released a bullish research note that
highlighted the Internet operations and suggested that investors
have just started assessing the value of the Website and whether
these operations are viable spin-off candidates.

PLAY (very speculative/debit spread):

BUY  CALL MAY-15.00 MI-EC OI=150 A=$4.37
SELL CALL MAY-17.50 MI-EW OI=85  B=$3.50
INITIAL NET DEBIT TARGET=$0.75 ROI(max)=233% B/E=15.75

Chart = http://quote.yahoo.com/q?s=MI&d=3m
******************************************************************
MOT - Motorola  $83.00     *** LEAPS/Covered-Calls ***

Motorola is an electronics giant! The company also makes two-way
radios, pagers, computers, electronic components and systems, and
networking peripherals. Cellular products are up nearly 40% of
Motorola's sales and semiconductors account for 24%. Motorola has
operations in about 60 countries and gets about half of its sales
from outside the US. It also provides wireless telecom services in
developing nations and owns 20% of the Iridium satellite network.

Motorola is expected to report first quarter earnings (next week)
that are better than last year's Asia-impacted results. The chip
industry business seems to be turning around a little faster than
expected and strong semiconductor demand helped offset continued
weakness in pagers. Sales of wireless telephone handsets also
appeared to be stronger than originally anticipated. The problem
is; a number of analysts are expecting Motorola to do better than
expected and if they were to report earnings that just meet the
consensus, that could be viewed as a disappointment. Analysts are
also concerned about MOT's exposure to Iridium Communications,
which provides satellite-based global wireless phone service. MOT
carries a hefty portion of the company's debt and Iridium said it
no longer expected to break even on a cash flow basis by year-end.

Regardless of the earnings outcome, Motorola has become a favored
blue-chip stock in the telecom industry and the long-term outlook
is positive. The technical break-out that occured when MOT moved
above the recent range near $70 also reflects a definite change
of character and makes this issue an excellent candidate for a
"Covered-Calls with LEAPS" play.

PLAY (conservative/long-term):

BUY  CALL JAN00-85 LMA-AQ OI=984 A=$11.75
SELL CALL APR-85   MOT-DQ OI=407 B=$1.38
INITIAL NET DEBIT TARGET=$10.00 TARGET ROI=100%

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

*****************************************************
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The Option Investor Newsletter            4-11-99
Sunday                6  of  6

*********************
COVERED CALL SECTION
*********************

Selling LEAPS...

One of our subscribers requested that we discuss selling LEAPS as
covered-calls. Here are the basic facts...

LEAPS - Long-term Equity AnticiPation Securities are long-term
options with expiration dates as far as three years in the future
that allow investors to establish long or short positions.

Strategies involving selling LEAPS options do not differ much from
those involving shorter-term options. LEAPS can be sold against
the underlying stock just as short-term options can. The covered
write position will have the same limited profit potential when
compared to outright stock ownership but will outperform that
strategy if the stock price falls or remains relatively unchanged.
A trader that sells LEAPS will take in substantial premium when
compared to the short-term covered-call and thus has a smaller
cash investment (since he is selling a more expensive option).
The larger premium of this call also produces a significantly
lower break-even price for the overall position and the LEAPS
writer has a higher net return if exercised, because he wrote a
more expensive option initially. The long-term position can also
benefit from regular dividends.

The most significant difference in the LEAPS options is the slow
rate of time decay. These long-term options also retain their time
value even when they are substantially 'in' or 'out' of the money.
This characteristic will significantly affect a traders ability to
roll-out of a position because the option is relatively expensive
to buy back. On the other hand, the short-term covered call writer
that is faced with rolling down may transition to LEAPS as a means
of retaining a large premium even though he is moving to a less
profitable position. (Rolling down means to buy back the call that
is currently written and sell another with a lower strike price.)

The large absolute premiums available in this type of strategy
make these positions unusually attractive. The key is to compare
the difference in annualized returns from LEAPS versus those that
can be made from repeatedly selling the shorter-term calls.

Good Luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS (1 week until the April expiration)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt    Profit  ROI    Monthly
Sym    Picked Price        Price   Bid    /Loss          ROI

PROX   30.00  36.13   Apr  30.00  3.88  *$  3.88  14.9%  21.5%
KLOC   13.75  16.38   Apr  12.50  2.50  *$  1.25  11.1%  16.1%
FFD    10.88  10.31   Apr  10.00  2.00  *$  1.12  12.6%  13.7%
NTPA   10.69  10.75   Apr   7.50  3.63  *$  0.44   6.2%  13.5%
BVSI    8.75   9.38   Apr   7.50  1.69  *$  0.44   6.2%  13.5%
MMCN   15.19  22.13   Apr  15.00  1.44  *$  1.25   9.1%  13.2%
UBS    11.88  11.69   Apr  12.50  1.25   $  1.06  10.0%  10.8%
ARTT    9.38  13.00   Apr   7.50  2.56  *$  0.68  10.0%  10.8%
COOL   20.63  18.63   Apr  17.50  4.25  *$  1.12   6.8%   9.9%
DAOU    6.06   5.50   Apr   5.00  1.56  *$  0.50  11.1%   9.7%
MTIC    5.88   5.31   Apr   5.00  1.44  *$  0.56  12.6%   9.1%
FORE   20.56  23.00   Apr  17.50  3.75  *$  0.69   4.1%   8.9%
PPOD   11.00  10.50   Apr  10.00  1.50  *$  0.50   5.3%   7.6%
CMTO   25.38  26.75   Apr  22.50  3.63  *$  0.75   3.4%   7.5%
MCHM    9.75   8.09   Apr   7.50  2.88  *$  0.63   9.2%   6.6%
AXTI   21.25  21.75   Apr  17.50  4.75  *$  1.00   6.1%   6.6%
CUST   11.75  23.63   Apr  10.00  2.31  *$  0.56   5.9%   6.4%
FORE   18.75  23.00   Apr  15.00  4.38  *$  0.63   4.4%   6.4%
IDTC   17.25  30.81   Apr  15.00  2.88  *$  0.63   4.4%   6.4%
MMCN   14.56  22.13   Apr  12.50  2.75  *$  0.69   5.8%   6.3%
AMMB    9.88   7.94   Apr   7.50  2.88  *$  0.50   7.1%   6.2%
OMKT   14.00  16.19   Apr  12.50  2.00  *$  0.50   4.2%   6.0%
ESPI   10.88  15.19   Apr   7.50  3.75  *$  0.37   5.2%   5.6%
PROX   29.13  36.13   Apr  25.00  4.75  *$  0.62   2.5%   5.5%
VYTL   25.50  34.88   Apr  22.50  4.00  *$  1.00   4.7%   5.1%
GALT   23.94  30.50   Apr  20.00  5.00  *$  1.06   5.6%   4.9%
FORE   13.13  23.00   Apr  10.00  3.63  *$  0.50   5.3%   4.9%
NWAC   25.69  29.25   Apr  25.00  2.00  *$  1.31   5.5%   4.8%
PWAV   28.94  32.06   Apr  25.00  5.13  *$  1.19   5.0%   4.3%
NDB    26.88  46.63   Apr  22.50  5.00  *$  0.62   2.8%   4.1%
SUGN   22.50  17.25   Apr  17.50  5.50   $  0.25   1.5%   3.2%
ENZN   16.56  13.63   Apr  15.00  2.38   $ -0.55  -3.9%   0.0%
--------------------------------------------------------------
GSTX   11.06  13.50   May  10.00  2.13  *$  1.07  12.0%   7.4%
FIBR   25.13  23.50   May  20.00  7.00  *$  1.87  10.3%   6.4%
KLOC   13.75  16.38   May  10.00  4.75  *$  1.00  11.1%   6.0%
EXCA   14.25  19.13   May  12.50  2.75  *$  1.00   8.7%   5.4%

-ROI is equal to the profit (or loss) divided by the cost-basis.
 Monthly ROI represents the return on a monthly basis.
 Example: a 10% return in 20 days equals 15.2% ROI for a month).
-Margin is not used in any calculations.
-Profit/Loss Column: Asterisk indicates stock price above strike 
 price and should be called.  Stock that will not be called is 
 assumed sold at current price (for tracking purposes).
******************************************************************
NEW PICKS   
******************************************************************
Definitions:
OI - Open Interest
CB - Cost Basis (Prc pd - Prm rec'd = CB, the break-even point)
RC  - Return Called
RNC - Return Not Called (Stock Price Unchanged)
******************************************************************
Sequenced by Company
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

ARTT   13.00  Apr 12.50  AOQ DV  1.00  1108  12.00   4.17%   4.17%
MI     16.56  Apr 15.00   MI DC  2.56  75    14.00   7.14%   7.14%
------------------------------------------------------------------
AND     7.75  May  7.50  AND EU  1.25  726    6.50  15.38%  15.38%
ARTT   13.00  May 10.00  AOQ EB  3.75  995    9.25   8.11%   8.11%
EGGS   17.63  May 15.00  EGQ EC  3.63  163   14.00   7.14%   7.14%
HDL    13.88  May 12.50  HDL EV  2.31  94    11.57   8.04%   8.04%
HYPT   12.50  May 10.00  QPI EB  3.38  16     9.12   9.65%   9.65%
LBFC   10.69  May 10.00  QBB EB  1.50  280    9.19   8.81%   8.81%
OMKT   16.13  May 12.50  OQM EV  4.50  1045  11.63   7.48%   7.48%
PILL   16.88  May 15.00  PQQ EC  3.25  775   13.63  10.05%  10.05%
QGLY    5.13  May  5.00  QGY EA  0.63  57     4.50  11.11%  11.11%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

MI     16.56  Apr 15.00   MI DC  2.56  75    14.00   7.14%   7.14%
ARTT   13.00  Apr 12.50  AOQ DV  1.00  1108  12.00   4.17%   4.17%
------------------------------------------------------------------
AND     7.75  May  7.50  AND EU  1.25  726    6.50  15.38%  15.38%
QGLY    5.13  May  5.00  QGY EA  0.63  57     4.50  11.11%  11.11%
PILL   16.88  May 15.00  PQQ EC  3.25  775   13.63  10.05%  10.05%
HYPT   12.50  May 10.00  QPI EB  3.38  16     9.12   9.65%   9.65%
LBFC   10.69  May 10.00  QBB EB  1.50  280    9.19   8.81%   8.81%
ARTT   13.00  May 10.00  AOQ EB  3.75  995    9.25   8.11%   8.11%
HDL    13.88  May 12.50  HDL EV  2.31  94    11.57   8.04%   8.04%
OMKT   16.13  May 12.50  OQM EV  4.50  1045  11.63   7.48%   7.48%
EGGS   17.63  May 15.00  EGQ EC  3.63  163   14.00   7.14%   7.14%
******************************************************************
Company Descriptions
******************************************************************
ARTT - Advanced Radio Telecom  $13.00  *** 1 Week speculation ***

ARTT provides wireless broadband telecommunications services 
using microwave transmissions throughout the U.S. ARTT posted
a 4Q loss of $0.57 (vs. loss of $1.12) but also announced that
it is in negotiations with several parties for a significant
equity investment in the Company. For speculators, we offer a
one week play on a bullish stock, or our preferred, conservative
(though longer term) deep ITM approach.

APR 12.50 AOQ-DV Bid=1.00 OI=1108 CB=12.00 RC=4.17% RNC=4.17% 

conservative/longer term play:

MAY 10.00 AOQ-EB Bid=3.75 OI=995 CB=9.25 RC=8.11% RNC=8.11% 

Chart = http://quote.yahoo.com/q?s=ARTT&d=3m
******************************************************************
MI - Marshall Industries  $16.56 *** 1 week speculation ***

MI distributes industrial electronic components and production 
supplies. MI also provides services, such as inventory management,
kitting, programming of programmable logic devices and testing 
services. Could the recent buying on heavy volume be that MI's
use of the Internet to sell its wares is coming to light? We just
don't know for sure. A short term play may be within your risk-
reward tolerance, taking advantage of the current momentum, but 
avoiding a long term commitment while Marshall's technical health
is still questionable.

Apr 15.00 MI-DC Bid=2.56 OI=75 CB=14.00 RC=7.14% RNC=7.14% 

Chart = http://quote.yahoo.com/q?s=MI&d=3m
******************************************************************
                         - May Positions -
******************************************************************
AND - Andrea Electronics Corp.  $7.75  

Andrea designs, develops and produces electronic audio systems,
intercommunication systems, Anti-Noise products for voice 
activated computing and telecommunications and related electronic
equipment. No recent news as Andrea appears to be completing a
rounded bottom formation. The message boards are fairly active
and it appears some shorts have been covering (and hating it!)
Andrea has established a strong support area around $6.50, which
is at our cost basis.

May 7.50 AND-EU Bid=1.25 OI=726 CB=6.50 RC=15.38% RNC=15.38% 

Chart = http://quote.yahoo.com/q?s=AND&d=3m
******************************************************************
EGGS - Egghead.com  $17.63  *** Ready to Run? ***

Egghead.com is an Internet-only reseller of PC hardware, software,
and accessories. Its main Web site, egghead.com, has about 40,000
products, including computer hardware, software, and peripherals,
as well as excess, reconditioned, and close-out brand-name computer
products. They have a 24-hour hardware and software auction site.
On Wednesday Pacific Crest Securities initiated coverage on EGGS
with a 'buy' rating. Zacks expects earnings around 5/11. Egghead
is continuing a lateral consolidation phase on heavy BOP which
suggests the possibility of good things to come. Support exists
near our cost basis.

May 15.00 EGQ-EC Bid=3.63 OI=163 CB=14.00 RC=7.14% RNC=7.14% 

Chart = http://quote.yahoo.com/q?s=EGGS&d=3m
******************************************************************
HDL - Handleman Company $13.88  *** Teletubbies Mania! ***

Handleman chooses which music products go in customers' racks. It
serves mass merchants like Kmart, WalMart and other supermarkets, 
drugstores, and specialty chains. Handleman also owns 75% of the
Teletubbies product marketer "itsy bitsy Entertainment". HDL has
left the software and book distribution business and is leaving
video distribution to focus on its music/video business. Recently
announced a joint venture with Motion Picture Corporation (MPCA)
to produce five family feature films. Fairly bullish chart with
maxed out BOP. I wonder what their plans are for the Internet?
Hmmmmm.

May 12.50 HDL-EV Bid=2.31 OI=94 CB=11.57 RC=8.04% RNC=8.04% 

Chart = http://quote.yahoo.com/q?s=HDL&d=3m
******************************************************************
HYPT - Hyperion Telecommunications  $12.50  *** Telecom ***

Hyperion Telecommunications is a facilities-based provider of 
local telecommunications services with 22 fiber optic networks
(as of 3/98) serving 46 cities located primarily in the eastern 
half of the United States. Hyperion is establishing itself well
in the fiber optic infrastructure, recently expanding into the
deep South. A change of character was evident in the BOP near mid
March and the price reacted accordingly, moving above a support
area at $11.

May 10.00 QPI-EB Bid=3.38 OI=16 CB=9.12 RC=9.65% RNC=9.65% 

Chart = http://quote.yahoo.com/q?s=HYPT&d=3m
******************************************************************
LBFC - Long Beach Financial Corp  $10.69

Long Beach Financial is engaged in originating, purchasing and 
selling subprime residential mortgage loans secured by one-to-four
unit family residences. LBFC share value paused momentarily after
it was downgraded on March 29, but then it resumed the up-trend,
closing above the Jan-Feb high. With volume increasing, the stock
may be ready to take-out last year's high.

May 10.00 QBB-EB Bid=1.50 OI=280 CB=9.19 RC=8.81% RNC=8.81% 

Chart = http://quote.yahoo.com/q?s=LBFC&d=3m
******************************************************************
OMKT - Open Market, Inc. $16.13  *** New Trend? ***

OMKT develops, markets, licenses and supports enterprise-class,
packaged application software products and professional services
enabling its customers to engage in Internet commerce, info 
commerce and publishing. On Tuesday, Open Market announced that 
for the third consecutive year, it is the worldwide market share
leader for Internet commerce software. The basing formation is
continuing with heavy buying pressure. The volume has started to
increase this last week, signaling a possible move up and out-of
the base. Earnings are expected around 4/23.

May 12.50 OQM-EV Bid=4.50 OI=1045 CB=11.63 RC=7.48% RNC=7.48% 

Chart = http://quote.yahoo.com/q?s=OMKT&d=3m
******************************************************************
PILL - ProxyMed, Inc.  $16.88  

PILL provides healthcare electronic data interchange ("EDI") 
products and services to physicians, independent physician
associations, insurance payers, pharmacies, laboratories and 
nursing homes. ProxyMed continues to climb (but our concern is
that it is getting overextended) The last consolidation was
lateral and BOP has been maxed since the middle of March with
increasing volume support. This is a fairly conservative play
with PILL reaching a new 2 year high and new support around the
cost basis. Earnings are expected around 4/21.

May 15.00 PQQ-EC Bid=3.25 OI=775 CB=13.63 RC=10.05% RNC=10.05% 

Chart = http://quote.yahoo.com/q?s=PILL&d=3m
******************************************************************
QGLY - Quigley Corporation  $5.13  *** Speculation ***

QGLY is engaged in the development, manufacturing, and marketing 
of homeopathic cold remedies. QGLY proprietary products include 
Cold-Eeze and Cold-Eezer Plus. Has Quigley finally reached a base?
Will it last another 6 weeks or even longer? Does Cold-Ease really
work (I have used it!)? The tape is showing a definite increase in
buying pressure with some positive divergence's (maybe signaling
a change in character?) and may finally provide some answers.

May 5.00 QGY-EA Bid=0.63 OI=57 CB=4.50 RC=11.11% RNC=11.11% 

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

******************************************************************
CALLS STRICTLY PERCENTAGE LIST
******************************************************************
These Pct are not calculated using margin. These are pure 
returns. Margin will increase the percentages. No recommendation
is made on these plays. This is only a numerically produced list 
of the options with the highest percentage of return for dollars
invested. If you want to do your own research this is where to 
start.

Stock Price Month Strike Symbol Price PctRtn Vol OpnInt
MI    16.50 May  17.50   MIEW   3.75 22.73   344    85
SCUR   4.73 May   5.00  UQUEA   0.94 19.80     3    35
HPH   10.00 May  10.00  HPHEB   1.88 18.75   742   131
PDX   14.19 May  15.00  PDXEC   2.63 18.50    38   288
DCTM  13.38 May  15.00  QDCEC   2.38 17.76   286   720
KTIE   9.38 May  10.00  QQJEB   1.63 17.33    90   285
SPYG  16.19 May  17.50  YQGEW   2.56 15.83    96   230
CLFY  21.50 May  22.50  QCYEX   3.38 15.70    17   303
DANKY  4.50 May   5.00  DNQEA   0.69 15.28    32  2003
SKYT  17.50 May  17.50  MMQEW   2.63 15.00   229   769
CUST  23.63 May  25.00  HQUEE   3.50 14.81    31    32
WSTL   7.25 May   7.50  QLWEU   1.06 14.66   319   388
REV   24.38 May  25.00  REVEE   3.50 14.36    32   716
EAII  23.88 May  25.00  QNEEE   3.38 14.14    22   204
SKYC  11.50 May  12.50  KQFEV   1.63 14.13    85    65
HYPT  12.50 May  12.50  QPIEV   1.75 14.00     8    60
MERQ  29.50 May  30.00  RQBEF   4.13 13.98    25   115
OMKT  16.19 May  17.50  OQMEW   2.25 13.90   398   636
CHRZ   9.94 May  10.00  ZQHEB   1.38 13.84    57   160
VMSI  17.50 May  20.00  QMPED   2.38 13.57    22     4
TIER   6.94 May   7.50  QTIEU   0.94 13.51     8    10
PILL  16.75 May  17.50  PQQEW   2.25 13.43   277   161
EXCA  19.13 May  20.00  XQAED   2.56 13.40   368   175
PLC    3.75 May   5.00  PLCEA   0.50 13.33   169    60
TLXN   9.38 May  10.00  TNQEB   1.25 13.33    10   209
ENMD  24.75 May  25.00  QMAEE   3.25 13.23    45   692
PAIR   9.56 May  10.00  PQGEB   1.25 13.07   383  2788
WIND  13.88 May  15.00  QWVEC   1.81 13.06    47   153
MMCN  22.13 May  22.50  CMQEX   2.88 12.99    10     8
MDM    4.88 May   5.00  MDMEA   0.63 12.82   125   433
CYTC  14.75 May  15.00  YQKEC   1.88 12.71     4   228
GOAL  12.38 May  12.50  NDQEV   1.69 12.63    20    64
BEAM  14.00 May  15.00  BAQEC   1.75 12.50  1047   448
OMPT  13.56 May  15.00  QTTEC   1.69 12.44   122  1964
RATL  24.13 May  25.00  RAQEE   3.00 12.44    20   315
PDX   14.19 May  17.50  PDXEW   1.75 12.33    42   158
PDLI  14.50 May  15.00  PQIEC   1.75 12.07    40    66
AHAA  28.00 May  30.00  GAQEF   3.38 12.05    19    20
SCSWF  9.88 May  10.00  QSOEB   1.19 12.03    45    54
GSNX  12.50 May  12.50  GQSEV   1.50 12.00     3    39
FGCI   7.31 May   7.50  JZQEU   0.88 11.97    15   798
SPYG  16.19 May  20.00  YQGED   1.94 11.97   332    26
IMRS  14.69 May  15.00  QIQEC   1.75 11.91     6   378
SKYT  17.50 May  20.00  MMQED   2.06 11.79   183   846
GELX  14.38 May  15.00  GQXEC   1.69 11.74    23    29
IFMX   7.00 May   7.50  IFQEU   0.81 11.61   163  2585
ENTU  29.06 May  30.00  QYEEF   3.38 11.61     3   254
STII  17.06 May  17.50  SDQEW   1.94 11.36    15    96
CPWR  21.00 May  22.50  CWQEX   2.38 11.31   201   505
HPRT   5.00 May   5.00  HQKEA   0.56 11.25     5   280
LOD    5.00 May   5.00  LODEA   0.56 11.25    25  1151
NCDI   5.00 May   5.00  NQKEA   0.56 11.25    50    43
CIEN  17.25 May  17.50  EUQEW   1.94 11.23   498    81
RESM  22.50 May  22.50  QRVEX   2.50 11.11     5    10
SYBS   7.31 May   7.50  SBQEU   0.81 11.11   223   323
MTZ   22.00 May  22.50  MTZEX   2.44 11.08     5   150
ARTT  13.00 May  15.00  AOQEC   1.44 11.06    25   299
NSIT  23.75 May  25.00  QNTEE   2.63 11.05    43   103
CYCH  15.94 May  17.50  KBQEW   1.75 10.98   178   392
AVID  18.38 May  20.00  AQIED   2.00 10.88   121   276
FORE  23.00 May  25.00  FQOEE   2.50 10.87   606  1782
DOX   22.50 May  22.50  DOXEX   2.44 10.83    20    85
UTI    9.81 May  10.00  UTIEB   1.06 10.83     5    44
PRXL  16.81 May  17.50  VBQEW   1.81 10.78     7    10
AFCI   9.31 May  10.00  AQFEB   1.00 10.74    71   746
UAG    9.31 May  10.00  UAGEB   1.00 10.74    55   340
XIRC  20.38 May  22.50  XQREX   2.19 10.74    38   372
AKLM   7.00 May   7.50  KKQEU   0.75 10.71   138    72
VLNC   7.00 May   7.50  VHQEU   0.75 10.71    14   120
WAVO   8.19 May  10.00  WKQEB   0.88 10.69   135  1949
SEV    4.13 May   5.00  SEVEA   0.44 10.61    25   122
EX    14.75 May  15.00   EXEC   1.56 10.59   120   681
GCTI  13.00 May  15.00  QHFEC   1.38 10.58    15    73
CDNW  14.25 May  15.00  NWQEC   1.50 10.53   272   978
TAXI  17.50 May  17.50  TQXEW   1.81 10.36    20   426
CYMI  18.13 May  20.00  CQGED   1.88 10.34   150   188
WDC    7.25 May   7.50  WDCEU   0.75 10.34    66   170
FC     9.75 May  10.00   FCEB   1.00 10.26    20    50
IOM    4.88 May   5.00  IOMEA   0.50 10.26   250  6415
ZAP    9.19 May  10.00  ZAPEB   0.94 10.20   771  2609
PTVL  20.88 May  22.50  QUTEX   2.13 10.18    97   318
FGI   14.81 May  15.00  FGIEC   1.50 10.13    30   290
KEA   21.13 May  22.50  KEAEX   2.13 10.06   167   109
KNT    9.94 May  10.00  KNTEB   1.00 10.06     4    24
ITCD  24.94 May  25.00  QIJEE   2.50 10.03   200     7
SGI   12.50 May  12.50  SGIEV   1.25 10.00    20  1173
INTV   9.38 May  10.00  VQNEB   0.94 10.00    20    72
BEAM  14.00 Jun  15.00  BAQFC   2.75 19.64   971   411
SKYT  17.50 Jun  17.50  MMQFW   3.38 19.29    25   906
PGNS  12.00 Jun  12.50  PHQFV   2.13 17.71     5    93
CHRZ   9.94 Jun  10.00  ZQHFB   1.75 17.61    56   177
MAST  11.75 Jun  12.50  QACFV   2.06 17.55    10   145
ETEC  25.00 Jun  25.00  EBQFE   4.25 17.00    43     6
EXCA  19.13 Jun  20.00  XQAFD   3.25 16.99    13     2
EAII  23.88 Jun  25.00  QNEFE   4.00 16.75    18     4
SKYC  11.50 Jun  12.50  KQFFV   1.88 16.30    15    10
VLNC   7.00 Jun   7.50  VHQFU   1.13 16.07    10   957
SIPX  12.06 Jun  12.50  UQXFV   1.94 16.06     4    68
TERA   6.44 Jun   7.50  QIPFU   1.00 15.53    10  1015
NETA  16.31 Jun  17.50  CQMFW   2.50 15.33   152  1058
ASPT   6.63 Jun   7.50  ATQFU   1.00 15.09    28   181
NCDI   5.00 Jun   5.00  NQKFA   0.75 15.00    10   114
CYCH  15.94 Jun  17.50  KBQFW   2.38 14.90    33  1949
CERN  12.50 Jun  12.50  CQNFV   1.75 14.00    79    25
AVID  18.38 Jun  20.00  AQIFD   2.56 13.95     5    68
MCHM   8.09 Jun  10.00   QQFB   1.13 13.90    65   878
PPOD  10.50 Jun  12.50  QPPFV   1.44 13.69     4   500
BTIM  13.30 Jun  15.00  QBOFC   1.81 13.63    30   341
OEI    6.94 Jun   7.50  OEIFU   0.94 13.51     6  3883
VTEL   4.63 Jun   5.00  VQEFA   0.63 13.51    96   795
DRMD   8.94 Jun  10.00  DUQFB   1.19 13.29    55  1020
PRTL  10.38 Jun  12.50  PQWFV   1.38 13.25    10    98
PGA    7.25 Jun   7.50  PGAFU   0.94 12.93    10    42
UBS   11.69 Jun  12.50  UBSFV   1.50 12.83   112  1294
EGGS  17.63 Jun  20.00  EGQFD   2.25 12.66    87  1649
GLBL   9.50 Jun  10.00  GQOFB   1.19 12.50     3   688
CURE   8.06 Jun  10.00  NQHFB   1.00 12.40    17    93
ASDV   7.56 Jun  10.00  QDVFB   0.94 12.40     8   382
VSIO  22.38 Jun  22.50  VQJFX   2.75 12.29   140    84
SEV    4.13 Jun   5.00  SEVFA   0.50 12.12     5   491
DBCC  17.63 Jun  20.00  BQDFD   2.13 12.06   171  1376
BVSI   9.38 Jun  10.00  VQBFB   1.13 12.00    30   140
SKYT  17.50 Jun  20.00  MMQFD   2.06 11.79    62  1367
CRUS   6.38 Jun   7.50  CUQFU   0.75 11.76    20   319
GADZ   7.44 Jun   7.50  EQKFU   0.88 11.76     5    76
CWC    8.13 Jun  10.00  CWCFB   0.94 11.54     5   396
STE   24.44 Jun  25.00  STEFE   2.81 11.51    15    25
CKR   14.50 Jun  15.00  CKRFC   1.63 11.21    17    75
ANIC   9.31 Jun  10.00  NIQFB   1.00 10.74    10   146
NETA  16.31 Jun  20.00  CQMFD   1.75 10.73   239  1776
TWMC  10.56 Jun  12.50  TQTFV   1.13 10.65     5   273
GSTRF 19.00 Jun  20.00  YVQFD   2.00 10.53    89  3249
GEMS   3.63 Jun   5.00  GQMFA   0.38 10.34     9   581
NBR   16.94 Jun  17.50  NBRFW   1.75 10.33    10   766
PLAT  24.31 Jun  25.00  FLQFE   2.50 10.28   305  1845
EAII  23.88 Jun  30.00  QNEFF   2.44 10.21    20    12
DUSA   8.00 Jun  10.00  QDUFB   0.81 10.16     1    62
DO    29.88 Jun  30.00   DOFF   3.00 10.04    22  1300
IDC    4.38 Jun   5.00  IDCFA   0.44 10.00   120  4228
REXI  10.00 Jun  10.00  QREFB   1.00 10.00    20   129



************************************************************
NAKED PUT SECTION
************************************************************

Market-Makers:

There are still many of our readers that do not understand the
concept of the floor specialist or market-maker. Here are some of
the basic concepts...

In the stock market, specialists are required to make a market in
a stock when public orders to buy or sell the stock are absent.
They will buy and sell from their own inventory to keep a position
liquid. They also keep the public book of orders (limit and stop
orders to buy and sell). When option trading started, the Chicago
Board of Options Exchange (CBOE) introduced a similar method of
trading; the market-maker and board broker system. The CBOE has
several market-makers for each optionable stock and they provide
bids and offers in the absence of public orders. These traders
do not participate in the retail trading, they buy and sell for
their own accounts only. A separate specialist, the board broker,
keeps the book of limit orders. The board broker cannot do any
trading but he manages the book so other floor traders can see
how many orders to buy and sell are near the current market (the
highest bid and lowest offer). The CBOE system is very efficient
because several market-makers compete to create the market in a
single security. The 'open book" method of public orders also
provides a very orderly trading forum. In contrast, the American
Stock Exchange (AMEX) uses specialists for option trading, but it
also has floor traders who function similarly to market-makers.
Most of the regional option exchanges use various combinations of
the two systems. 

To learn more about the market-maker system (and how your trades
are actually executed), go to:

http://www.cboe.com/exchange/tradeflr.htm

Good Luck!
------------------------------------------------------------------
                      *** WARNING!!! ***
Occasionally a company will experience catastrophic news causing
a severe drop in the stock price. This may cause a devastatingly
large loss which may wipe out all of your smaller gains. There is
one very important rule; Don't sell naked puts on stocks that you
don't want to own! It is also important that you consider using
trading STOPS on naked option positions to help limit losses when
the stock price drops. Many professional traders suggest closing
the position when the stock price falls below the sold strike or
using a buy-to-close STOP at a price that is no more than twice
the original premium from the sold option.
******************************************************************
SUMMARY OF PREVIOUS PICKS (1 week left for April strike)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt    Profit  ROI    Monthly
Sym    Picked Price        Price   Bid    /Loss          ROI

HDL    13.25  13.69   Apr  12.50  0.69  *$  0.69  13.2%  28.6%
XCED   14.88  17.63   Apr  12.50  0.50  *$  0.50  12.3%  26.7%
WAVO    9.25   8.19   Apr   7.50  0.44  *$  0.44  18.4%  26.7%
DRMD    6.81   8.94   Apr   5.00  0.44  *$  0.44  24.4%  26.6%
FIBR   25.13  23.50   Apr  20.00  0.56  *$  0.56  10.0%  21.8%
XCED   12.38  17.63   Apr  10.00  0.44  *$  0.44  14.6%  21.2%
ARTT    8.38  13.00   Apr   7.50  0.75  *$  0.75  23.3%  20.2%
PROX   30.00  36.13   Apr  25.00  1.13  *$  1.13  13.9%  20.1%
PROX   29.13  36.13   Apr  22.50  0.56  *$  0.56   8.8%  19.0%
NDB    25.13  46.63   Apr  20.00  1.06  *$  1.06  17.4%  18.9%
ZD     24.63  17.56   Apr  17.50  0.63  *$  0.63  11.3%  16.4%
NDB    26.88  46.63   Apr  22.50  0.81  *$  0.81  11.3%  16.3%
TERN   39.13  45.25   Apr  30.00  0.63  *$  0.63   7.4%  16.2%
MCHM    9.75   8.09   Apr   7.50  0.56  *$  0.56  22.3%  16.2%
AMMB    9.88   7.94   Apr   7.50  0.44  *$  0.44  18.2%  15.8%
FORE   13.13  23.00   Apr  10.00  0.50  *$  0.50  16.0%  14.7%
CYCH   15.00  15.94   Apr  12.50  0.38  *$  0.38   9.8%  14.2%
ZD     25.06  17.56   Apr  17.50  0.75  *$  0.75  13.0%  14.1%
MCHM   10.31   8.09   Apr   7.50  0.38  *$  0.38  15.6%  13.5%
SUGN   22.50  17.25   Apr  17.50  0.56   $  0.31   6.1%  13.3%
EGGS   19.69  17.63   Apr  15.00  0.50  *$  0.50  11.3%  12.2%
COOL   20.63  18.63   Apr  15.00  0.38  *$  0.38   8.4%  12.2%
COOL   20.81  18.63   Apr  15.00  0.50  *$  0.50  10.7%  11.7%
DRIV   44.94  46.75   Apr  35.00  0.44  *$  0.44   4.7%  10.1%
PWAV   27.06  32.06   Apr  22.50  0.63  *$  0.63   9.1%   9.9%
MUSE   46.13  46.00   Apr  35.00  0.44  *$  0.44   4.6%   9.9%
RCNC   31.31  38.88   Apr  25.00  0.50  *$  0.50   7.4%   8.0%
WKR    21.38  23.50   Apr  17.50  0.38  *$  0.38   7.5%   6.5%
NWAC   25.69  29.25   Apr  22.50  0.50  *$  0.50   6.6%   5.7%
ITX    15.06  11.63   Apr  12.50  0.31   $ -0.56 -14.9%   0.0%

-ROI is equal to the profit (or loss) divided by the original
 investment requirement (varies broker to broker). 
-Monthly ROI represents the return on a monthly basis.
 Example: a 10% return in 20 days equals 15.2% ROI for a month).
-Profit/Loss Column: Asterisk indicates stock price above strike
 price and put option should expire - not be exercised.  Stock 
 to be exercised assumed sold at current price.(for tracking)
******************************************************************
NEW PICKS
******************************************************************
Definitions:
OI  - Open Interest
CB  - Cost Basis (break-even point if put exercised) 
ROI - Return On Investment (based on standard collateral formulas)
******************************************************************
Sequenced by Company
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

GSB    24.50  Apr 22.50  GSB PX  0.50  320   22.00   6.02%
----------------------------------------------------------
BNYN   17.38  May 12.50  QYN QV  0.56  80    11.94  13.88%
CYCH   15.94  May 15.00  KBQ QC  1.63  24    13.37  23.07%
DELL   43.63  May 35.00  DLQ QG  0.88  23955 34.12   9.07%
ENMD   24.75  May 20.00  QMA QD  1.50  757   18.50  22.56%
NMR    27.81  May 22.50  NMR QX  0.44  20    22.06   7.04%
NWAC   29.25  May 25.00  NAQ QE  0.50  4     24.50   6.29%
ONSL   37.06  May 30.00  QOL QF  2.25  287   27.75  22.47%
PAIR    9.63  May  7.50  PQG QU  0.44  57     7.06  18.60%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

GSB    24.50  Apr 22.50  GSB PX  0.50  320   22.00   6.02%
----------------------------------------------------------
CYCH   15.94  May 15.00  KBQ QC  1.63  24    13.37  23.07%
ENMD   24.75  May 20.00  QMA QD  1.50  757   18.50  22.56%
ONSL   37.06  May 30.00  QOL QF  2.25  287   27.75  22.47%
PAIR    9.63  May  7.50  PQG QU  0.44  57     7.06  18.60%
BNYN   17.38  May 12.50  QYN QV  0.56  80    11.94  13.88%
DELL   43.63  May 35.00  DLQ QG  0.88  23955 34.12   9.07%
NMR    27.81  May 22.50  NMR QX  0.44  20    22.06   7.04%
NWAC   29.25  May 25.00  NAQ QE  0.50  4     24.50   6.29%
******************************************************************
Company Descriptions
******************************************************************
GSB - Golden State Bank  $24.50     *** Big Settlement ***

Golden State Bancorp operates about 360 California Federal Bank
branches in California and Nevada. The #2 US savings and loan,
Cal Fed conducts consumer and business banking, insurance sales
and securities brokering. GSB originates mortgage loans through
subsidiaries. A U.S. Court just awarded Glendale Bank, a unit of
GSB, $909 million in damages against the government in the first
of over a hundred cases linked to the savings and loan bailout of
the late 1980s. We like the recent bullish technicals!

Apr  22.50  GSB PX  Bid=0.50  OI=320  CB=22.00  ROI=6.02%

Chart = http://quote.yahoo.com/q?s=GSB&d=3m
******************************************************************
May Strikes...
******************************************************************
BNYN - Banyan Systems  $17.38     *** On The Rebound! ***

Banyan Systems makes networking and Internet software that helps
users locate resources and other users. They also offer Internet
directories and Banyan's customers include PCS Group, Siemens,
and the US Air Force. More than a third of sales are outside the
US. A recent upgrade, a huge deal with Qwest and the possible
IPO offering of Switchboard (their online directory) are all
conspiring to bring this beaten stock back to life.

May  12.50  QYN QV  Bid=0.56  OI=80  CB=11.94  ROI=13.88%

Chart = http://quote.yahoo.com/q?s=BNYN&d=3m
******************************************************************
CYCH - CyberCash  $15.94     *** Internet Commerce ***

CyberCash helps consumers make online purchases, offering secure
payment transaction services that encrypt credit card information.
It processes 100,000 transactions a day utilizing electronic cash
payment software and electronic billing and payment software. The
company's ICVerify subsidiary provides point-of-sale credit card
authorization. CYCH jumped after winning approval of a settlement
ending a shareholder's lawsuit over its anti-takeover defense.The
stock looks poised to move higher.

May  15.00  KBQ QC  Bid=1.63  OI=24  CB=13.37   ROI=23.07%

Chart = http://quote.yahoo.com/q?s=CYCH&d=3m
******************************************************************
DELL - Dell Computers  $43.63     *** Own This One! ***

Dell is one of the world's top PC makers and the #1 direct-sale
computer vendor. The company sells hardware and markets software
and peripherals including notebooks, PCs, and network servers.
More than 90% of its systems are sold to businesses & government
entities. The company continues to expand services such as its
Web site, expected to process half of Dell's transactions by the
year 2000. DELL is just DELL, and that should be enough, but wait
for the market to firm on Monday (after CPQ's earnings warning!)

May  35.00  DLQ QG  Bid=0.88  OI=23955  CB=34.12   ROI=9.07%

Chart = http://quote.yahoo.com/q?s=DELL&d=3m
******************************************************************
ENMD - Entremed  $24.75     *** A Silver Bullet? ***

ENMD develops anti-angiogenic drugs, which inhibit the abnormal
growth of new blood vessels. Angiogenesis is associated with
cancer, rheumatoid arthritis, and other diseases. EntreMed's
Angiostatin and Endostatin have successfully blocked the growth
of blood vessels in cancer tumors. EntreMed is also working on a
blood-cell permeation device (a drug delivery system) and has
permission to make the controversial drug thalidomide to treat
AIDS-related cancer. Also recently formed a partnership with the
National Cancer Institute to develop an anti-cancer agent and
angiogenesis inhibitor.

May  20.00  QMA QD  Bid=1.50  OI=757  CB=18.50  ROI=22.56%

Chart = http://quote.yahoo.com/q?s=ENMD&d=3m
******************************************************************
NMR - Nielsen Media Research  $27.81    *** Internet Ratings? ***

NMR measures television audience size at the national and local
levels in the US and Canada. The company has "People Meters" in
randomly selected US households; these provide data on what is
being watched, as well as who is watching. NMR provides this info
networks, syndicators, advertisers, ad agencies, TV stations, and
other subscribers. The company is also expanding into Internet
ratings through its stake in Nielsen - NetRatings and they just
announced the completion of the largest, real-time measurement
for the Internet.

May  22.50  NMR QX  Bid=0.44  OI=20  CB=22.06  ROI=7.04%

Chart = http://quote.yahoo.com/q?s=NMR&d=3m
******************************************************************
NWAC - Northwest Airlines  $29.25   *** Own This One! ***

Northwest Airlines, the US's fourth-largest airline,  flies to
150 cities worldwide, with hubs in Detroit, Memphis, Minn-St.Paul,
Osaka, and Tokyo. The airline serves about 400 destinations in 80
countries and has an extensive alliance with Continental. NWAC is
one of the world's top air cargo carriers and owns a large part
of the WORLDSPAN computer reservation system as well as MLT and
and Northwest Aerospace Training. We like the bullish, technical
pattern and the long-term fundamental outlook.

May  25.00  NAQ QE  Bid=0.50  OI=4  CB=24.50  ROI=6.29%

Chart = http://quote.yahoo.com/q?s=NWAC&d=3m
******************************************************************
ONSL - Onsale  $37.06     *** Speculators Only! ***

ONSALE operates auctions on the World Wide Web, where it sells
such items as refurbished/closeout computers, electronics, sports
equipment, and time-share condominiums. Their auctions let people
bid on thousands of items per week. ONSALE has more than 650,000
registered bidders and continues to broaden its product variety
through alliances. More than 1,000 other Web sites have links to
ONSALE's site. A recent technical base is forming near $30 but
this is definitely a speculative Internet play.

May  30.00  QOL QF  Bid=2.25  OI=287  CB=27.75  ROI=22.47%

Chart = http://quote.yahoo.com/q?s=ONSL&d=3m
******************************************************************
PAIR - PairGain  $9.63     *** Mis-information! ***

PairGain's products enable high-speed transmission of data via
copper telephone lines, providing a cost-effective alternative
to installing and routing fiber optics directly to users while
allowing services such as high-speed Internet access. Regional
telephone companies are its biggest customers and they plan on
boosting sales in areas where copper infrastructure is pervasive,
particularly outside the US. The big news last week was a faked
news story posted on the Internet that boosted shares 20%. Maybe
some of this new attention will help the stock in the long run.

May  7.50  PQG QU  Bid=0.44  OI=57  CB=7.06  ROI=18.60%

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


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