Option Investor
Newsletter

Daily Newsletter, Sunday, 07/04/1999

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The Option Investor Newsletter            Sunday  7-4-99  1 of 7
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

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

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******************************************************************
MARKET STATS FOR LAST WEEK AND PRIOR WEEKS
******************************************************************
         WE 7-2           WE 6-25          WE 6-18          WE 6-11
DOW     11139.24 +586.68 10552.56 -303.00 10855.56 +365.06  -309.34  
Nasdaq   2741.02 +188.37  2552.65 - 10.79  2563.44 +115.64  - 30.54  
S&P-100   716.28 + 44.99   671.29 - 12.18   683.47 + 28.60  - 17.55  
S&P-500  1391.22 + 75.91  1315.31 - 27.53  1342.84 + 49.20  - 34.11  
RUT       456.51 + 13.40   443.11 -  1.94   445.05 +  7.04  -  4.32  
TRAN     3515.99 199.88   3316.11 - 80.23  3396.34 + 51.87  -118.26  
VIX        18.85            22.61            22.34            27.01
Put/Call     .47              .53              .43              .64
******************************************************************

A different kind of triple witching Friday !


No, we did not have another options expiration Friday. Instead the
three major indexes all soared to new highs. It has been a steady
procession of buyers after Greenspan blessed the markets on Wednesday
with a minor increase and neutral bias. The Dow, Nasdaq and S&P are
all in breakout mode and stretching into new territory. 

 

 


Even with the light volume on Friday there was no volatility.
Both the Dow and Nasdaq have cleared resistance and are in blue
sky. The outlook for lower interest rates has the tech heavy
Nasdaq heading for 3,000. (Please, not another CNBC special)
The Dow is making a major run on the backs of techs, banks
and of all stocks, Alcoa. AA has gained more than any other
Dow stock this year.

 

 


This Dow chart shows the three tests of the 10,450 support
and also in the first block (April) the strong run in the 
last earnings cycle. From it's last retest of 9700 before 
the April earnings run, the Dow gained +1500 points. Surely
we can wish for another +1500 point run from the 10,400 low
during this earnings cycle but don't hold your breath. That 
would put us at the 11,900 range and all but the most 
optimistic analysts are holding the line at 11,500 as a 
market top this summer. 

 


The Nasdaq was not able to mount a run last April. The
major blow here was the analyst hair cut given Dell and Intel
before earnings and the trial impact on Microsoft. With analysts
currently bullish on all four leading Nasdaq stocks, Dell, CSCO,
INTC and MSFT, it is almost a given that we cold tack on another 
+150 points before earnings are announced.

 


Everyone expects the second quarter earnings to be better than
the previous quarters in both sequential and prior year comparisons.
The pre-warnings have been less than expected and the several 
companies that have pre-announced earnings estimates have been 
up beat and positive. The S&P is widely expected to post an
average of a +12% increase in earnings but the tech sector is
expected to post a +40% avg earnings increase. This is why the
tech sector is the first to rally when times are good.

The stronger than expected jobs report on Friday only caused a
momentary pause in the markets. The bullish sentiment is just too
strong for anything but a disaster to crater us during the next two 
weeks. The +268K of new jobs was up from last months statistical
anomaly of -5k and also slightly higher than the running average
of 200k. Still nobody was concerned as the unemployment also rose
an very small +.1% from 4.2 to 4.3%. The only sign of inflation 
from the technology led productivity increase was the gain of +$.05
in the hourly wage. More than reasonable given the strength of the
economy.

As I mentioned, the markets rocked last week with their best week
of the year. The Dow added +5.6%, S&P +5.8% and the Nasdaq +7.4%.
The Nasdaq was powered by the Internet recovery. The big news for
the Internets next week will be the Yahoo earnings on Wednesday.
If Yahoo beats their estimates, the sector will continue to soar
as other Internets take the earnings spotlight. The prospect of
Yahoo beating estimates is about 100%, however because they are
widely expected to beat estimates the expectation has risen to 
a stratospheric level. Yahoo is officially expected to post $.08
but the whisper numbers are as high as $.15, or almost double.
If Yahoo only beats by one or two cents then it will be a dark
day at the Nasdaq. If they beat by four or five cents then they
may get off with only a minor reshuffle. If they pull off the 
seven or eight cent miracle then all will be joyful in Mudvile.
Now most of you know that I am a high risk trader but holding
Yahoo over earnings would be financial suicide in my book. Did
I mention that they are a split candidate? Just another complication
in your financial decision making. 

The market rally this week was caused by massive inflows of cash
from the sidelines after the Greenspan blessing. TrimTabs.com
said that $8.8 billion came into the market in the form of cash
into U.S. mutual funds. $3.5 billion went into global stock funds.
If the cash continues to flow then we could see a huge liquidity
driven bump. The wild card here again is the technical traders
nightmare. The Dow is up almost +600 points in the last six days
without a day off. Six days on the rally road and no pit stop.
Eight days is the longest streak we have had this year. My target
for a day off is Wednesday. I think traders will come back from
the long holiday and want to open new positions before earnings
get under way. Wednesday however could be restrained because of
the Yahoo earnings. Uncertainty about the Internet sector could
cause some cautionary profit taking. 

This is a non-week as far as economic reports are concerned. The
NAPM non-manufacturing index is due out Tue and Wholesale Inventories
on Thursday. These along with the regular weekly BTM Schroders,
LJR Redbook and API Oil stocks are routinely ignored and will be
road kill on the rally road this week. The market will definitely
not get any help or be hindered by economic reports. The only 
speck on the horizon is the closely followed Tankan Index in Japan.
The quarterly index of business sentiment and the most watched
portion called the diffusion index is expected to improve from
-47 to -35. If the index came in significantly stronger the Bank
of Japan would likely upgrade it's outlook on the economy. This
would drive the Japanese bond market sharply lower and impact the
world bond markets like falling dominos. Given the trouble the
U.S. bond market has had lately we could see another round of
instability. The stock market has been playing follow the leader
to the bond market lately but I think the smell of fresh profits
in the form of earnings could be enough to break the bond markets
grip on our destiny. Fortunately, we will know the outcome before
our markets open on Tuesday.

The earnings calendar is just getting started and the only two
of note this week are Yahoo and Alcoa.

7/6 Biomet Inc. (NASDAQ:BMET) Est = 0.35
7/7 Alcoa Inc. (NYSE:AA) Est = 0.63
7/7 Great Atlantic & Pacific (NYSE:GAP) Est = 0.48
7/7 Yahoo! Corp. (NASDAQ:YHOO) Est = 0.08
7/8 AirTouch Communications (NYSE:ATI) Est = 0.37
7/8 King World Productions (NYSE:KWP) Est = 0.53
7/8 Laidlaw Inc. (NYSE:LDW) Est = 0.18
7/8 Loews Cineplex (NYSE:LCP) Est = -0.23
7/8 Marriott International (NYSE:MAR) Est = 0.42
7/8 Safeway Inc (NYSE:SWY) Est = 0.44
7/9 Abbott Laboratories (NYSE:ABT) Est = 0.42
7/9 Pioneer Hi-Bred Interna (NYSE:PHB) Est = 1.65

If you do not already have open positions, I would be a buyer
on any pullback and I would look to add to any positions that
are moving in the right direction. Keep your stops close on
Wednesday in case of profit taking but be ready to buy back
at a lower price anything on which you are stopped out.

This will probably be the largest letter we ever publish. There
are so many good plays available this week that we went overboard.
When the market is moving in our direction and all the factors
move over to our side, we need to seize the advantage. Too often
we settle for what the market gives us and fight for every trade.
Hopefully any profit taking, when it comes, will be light and 
quick. Profit from it!

Have a great holiday, pick your entry points, sell too soon.


Jim Brown
Editor

PS: If you are only reading the email version and not viewing 
these sections on the website you are missing out. The imbedded
charts and links are provide a much more visual image on the
website than is possible in an email format.


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

I have been struggling this week trying to decide if I
should continue this feature. We have had several cancellations
recently due to "my" trading style. What my trading style has
to do with anybody else is beyond me but they did cancel.

The complaint is that "Jim gets in and out of the market
too fast". "If this is how you trade options then I am not
interested". etc, etc, etc.

First, I never said this was the way "YOU" should trade options.

Second, I started out this column with a huge disclaimer that
this was simply a recap of SOME OF MY TRADES and not a trading
suggestion. Somewhere along the line the disclaimer got dropped
for space considerations.

Third, I am sure that out of our thousands of readers that there
are many who have a much higher risk profile than me and many
who have a much lower risk tolerance.  

Fourth, get a life. If you are depending on this column for
anything more than education and light humor from my trials
and tribulations as a part time trader with an 80hr+ a week
job, then you came to the wrong place.


I view this column as a real life, things don't always go right,
education by the seat of my pants. I could easily just make up
trades that look pretty and profitable but if you have been a
reader for some time you know that honesty is my policy even
if it makes me look like a fool when I get bit by the market.
Everybody gets bit by the market. Mine is just publicly viewed.

I personally think the quitters were just readers who were 
looking for a reason to blame for their losses or misunderstanding
of the newsletter. Still if a few voice concerns then there must
be many who are thinking the same thing but are just not vocal.

I want to do what is best for you the reader. If it means 
continuing to expose myself for the benefit of others then I
will do it. If I am giving the wrong impression of option trading
then I will stop it immediately. I would appreciate your input.
Last time I asked for input on this column was several months
ago and I got buried with email. The readers who wanted to see
it far outweighed the ones who did not. Maybe times have changed.
Let me know how you feel.  jimsplays@OptionInvestor.com

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

I closed the July-$125 naked puts on Yahoo this week for $1.25.
I received $10.25 when I sold them three weeks ago and they would
probably have expired worthless. However, with Yahoo earnings
next Wednesday, anything was possible. I would always rather
have a clear $9 per share profit than risk it all for another
$1.00.  Better safe than sorry. If you remember, in January
I had some naked puts on MCHP and they missed earnings and gapped
down about -20% and took my bullet proof position and turned it
into fragments. Sell too soon.


 


After covering my naked puts I sold July-190 calls on Yahoo on
Thursday. I thought we could see a little pullback after the 
almost $40 jump in two days. I received $10.50 in premium. On
Friday when YHOO bounced off $172 the pullback appeared over I
covered them for $7.75. I then went long on YHOO at $175 and
rode it up to $177 before bailing out on a dip just before the
close. 

   


If I was going to try and teach anything here it would be to
try and learn everything you can about the patterns of the
stock you are going to play. Once you are comfortable with
a trend or cycle you can play it many different ways and
be far more profitable than just using one strategy. With 
only one trading day before Yahoo earnings I elected to 
play the stock for the short rise instead of calls. Holding
calls over the weekend would have subjected me to excessive
premium decay over the long weekend. A $12 call on Friday
could have easily been $10 on Tuesday morning. Had Yahoo
not firmed on Friday afternoon I was hoping to get the 
benefit of the premium decay in the 190 calls I was holding.
You have to be flexible and play what the market gives you
and not be locked into a buy and hold mindset. I am currently
holding a $13.75 per share profit on Yahoo from the last
three weeks and the big money is still to come.

 


Check out the Yahoo chart above. See the spikes directly 
corresponding to the earnings announcements in Jan and Apr.
Two days before each earnings announcement Yahoo was at $180.
With earnings there was a spike to over $200. Immediately
after earnings there is a serious decline. My plan is to
watch Yahoo on Tuesday and buy the stock if the pattern
continues. I will follow it up with a trailing stop and
get out on any weakness. Thursday morning, assuming they
do not announce a split, I will sell July calls again on
any opening bump and then once the stock starts easing I
am going to short the stock and ride it back down. The 
plan is to collect premiums on the calls which should 
expire worthless and also cover the short when/if the 
stock shows any strength over the next week. Will this work?
The wild card is the strongly bullish market sentiment and
a possible split announcement. If they announce a split
then I will have to key on the split date and the stock
reaction to decide if I still want to sell calls. Unless
the split date is within four weeks I should still be able
to write the calls and have them expire on July-16th. 
The bullish Internet sector may or may not impact the play.
Internets were bullish on each of the last two earnings
cycles and Yahoo still went down. It will be fun!

The Ameritrade naked puts I had last Sunday were closed on 
Monday morning for a break even when AMTD dropped over $4 at the 
open and broke my $81 mental stop. This was a real shame because 
I had a large position and begining Monday afternoon AMTD rose 
from that sub $81 low to over $110 in just two days. Ouch! Better 
missed profit than lost money but I definitely suffered from 
sellers remorse the rest of the week.   

 


After the Fed announcement Wednesday I started several other
positions. I sold July naked puts on Microsoft and bought in the
money July calls. 

 


I sold in the money July-90 calls (MSFT was $88 at the time.
Since I expected MSFT to run into earnings I was able to get
more premium with the slightly ITM options. I bought July-80
calls to minimize my time premium and maximize the delta. So
far this trade is going according to plan. MSFT announces on
Monday July-19th so I still have two weeks for this play. By
buying July calls I force myself to be out before earnings.


Qcom offered another excellent opportunity to sell puts. It
had dropped down about -$5 from it's morning high during the
Fed meeting on Wednesday. As soon as the announcement came I
sold July-140 naked puts for $6.88. I had planned to also buy
calls but by the time I had finished selling the MSFT and QCOM
puts QCOM had valted to +$9 and I elected to skip the call side.
The stock gave me a scare on Thursday when it dropped -$4 to 
139.88 right at the close on an order imbalance but it gapped
open on Friday morning to relieve the pressure.

 


I have run out of space but not plays. I do not have room to
explain the other new plays I started but suffice to say I am
bullish on the prospects for this week. I was hoping for a
pullback on Friday to start these positions but I had to
settle for what the market gave me.


Current positions:

Short QCOM Puts  JUL-140 AAW-SH @ $ 6.88 (current $5.00)
Short MSFT Puts  JUL-90  MSQ-SR @ $ 3.50 (current $1.56)
Long  MSFT Calls JUL-80  MSQ-GP @ $ 8.75 (current 12.00)
Long  SEPR Calls JUL-80  ERQ-GP @ $ 8.75 (current $8.88)
Long  NSOL Calls JUL-70  JNQ-GN @ $14.25 (current 14.25)
Long  LCOS Calls JUL-90  QWL-GR @ $12.75 (current 12.75)
Long  BRCM Calls JUL-125 RDZ-GE @ $13.25 (current 15.63)
Long  SFE  Calls JUL-60  SFE-GL @ $ 7.50 (current  7.88)
Long  TXN  Calls JUL-130 TXN-GF @ $13.13 (current 13.50)
Long  VOD  Calls JUL-190 VOD-GR @ $16.38 (current 16.25)
(expecting a 4:1 split on Vodaphone) 





SEMINAR UPDATE
***************

The Boston and the Los Angeles seminars are over.
There are only two left, Dallas and San Francisco.
Remember there is a money back guarantee and you can take a 
spouse, sibling or friend for free. What more could you ask for?

Home Study Course

Many have expressed disappointment in the scheduling since
they had already planned their vacations. To handle this
problem we recomend the Home Study Option. You get the 
video tapes and the 500 page workbook immediately and are
free to attend the seminar , anytime in the future and as 
many times as you want for free.


Seminar Schedule

July 18 & 19
DALLAS / Airport Marriott

July 25 & 26
SAN FRANCISCO / Crown Planza


If you are tired fighting the market and are ready to step up to 
the next level then we strongly suggest you attend. There is a full 
money back guarantee and we will allow you to retake the seminar for 
free as many times as you feel necessary to grasp and implement all 
the techniques taught. People fly from around the world to hear George 
speak and you can have two full days of personal attention at the 
OIN/Optionetics seminars.

Go here for details: 
http://www.OptionInvestor.com/seminar/index.asp

We guarantee you will not be disappointed!




Market Sentiment 
*****************
Sunday, July 4, 1999 

Fireworks In July

Wow, equity markets are looking very good as we celebrate 
the 4th of July. Many of the broad market indices closed at 
record levels and our technical and sentiment indicators look 
positive for the moment. 

Now that we have reached new levels, Pinnacle will be evaluating
closely the level of investor sentiment to make sure our trusted 
indicators are not reaching extreme levels.  We did find it 
somewhat interesting that the put/call ratio actually INCREASED
over the past couple of days suggesting that options speculators
don't believe this market rally.

Keep you eye on what happens near the 11,500 level on the DOW.  
That's where many market analysts believe that the market will
top out this year.


 


Bullish Signs:
--------------

Market Posture:
Several indexes breaking into new highs, including hardware, 
networking, software, and semiconductors.

Russell 2000: 
Trending above both moving average, and also above key 450 
benchmark.

Market Volatility (VIX):  
The VIX is firmly below its 50-day moving average (19.19). 

Pinnacle Index:
The Pinnacle Index decreased in the amount of overhead resistance 
(OEX 680-750), and increased in the amount of support (OEX 645-
660).


Mixed Signs:
--------------

Advance/Decline Line:
Following the favorable FED action, the advance/decline line is 
finding support and is beginning to turn up. 

Interest Rates:
With the help of the FED action, the 30-yr treasury yield is 
beginning to retrace back under the key 6% level.

BEARISH Signs:
--------------

Investor Intelligence:  
As a contrarian indicator, the percent of Bullish investors 
is over 55.0%. 

Peak Open Interest:  
The contraian put-call ratio clocking in at 1.10 suggesting 
bullish sentiment picking up steam.



OTM Call Analysis
--------------

As we move through July's expiration cycle, Pinnacle is tracking 
the level of call buying (OTM) between 680-750 among option
speculators. As we have been documenting, excessive out-of-the-
money (OTM) call may serve as overhead resistance.


July Expiration Cycle
OEX OTM Call Analysis (Open Interest July 680-750)
Date                 Open Interest     Change % 

Friday, June 18           35,225          -
Friday, June 25           63,342        +79.8%
Friday, July 2            87,833       +149.3%



Market Sentiment at a Glance     Friday
Indicator                        (7/2) 

Pinnacle Index (OEX):          

                    (680-750)      3.5
Overhead Resistance (680-700)      1.2
Underlying Support  (645-660)      2.5
                    (580-660)      6.6

Put/Call Ratios:

CBOE Total P/C Ratio                .5
CBOE Equity P/C Ratio               .3
OEX P/C Ratio                      1.1


Peak Open Interest (OEX):

Puts                               670
Calls                              680
P/C Ratio                         1.10

Market Volatility Index (VIX):	

CBOE VIX                         19.19   



Investors Intelligence:

Bullish                          55.8%
Bearish                          25.7%


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
Benchmark                        (7/2)

                    (680-750)     3.5
Overhead Resistance (680-700)     1.2

OEX Close                      716.28   
 
Underlying Support  (645-660)     2.5
                    (580-660)     6.6

 
Average ratings: 
Resistance levels 2.0 / Support Levels .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is building at the OEX 690/720 level 
while the underlying support is holding at the OEX 645/660 level.


Put/Call Ratio           Friday
Strike/Contracts         (7/2)

CBOE Total P/C Ratio     .48	
CBOE Equity P/C Ratio    .33
OEX P/C Ratio           1.13


Peak Open Interest   Friday
Strike/Contracts     (7/2)

Puts                 600 / 12,745
Calls                670 / 11,557
Put/Call Ratio       1.10



 



VIX
Volatility Index    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   
May 14, 1999        Top                 25.01 
June 25, 1999       Bottom              22.99  

July 2, 1999                            19.19  *




 



Investors
Intelligence        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
March 4, 1999       Bottom            49.1        32.5
May 14, 1999        Top               56.9        31.0 
June 25, 1999       Bottom            57.5        26.5

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 07, 1999                        56.4        31.6     
April 14, 1999                        55.9        30.5     
April 21, 1999                        56.4        30.8     
April 28, 1999                        56.1        30.7     

May 05, 1999                          58.1        27.6     
May 12, 1999                          56.9        31.0     
May 19, 1999                          60.9        28.7      
May 26, 1999                          61.6        27.7 

June 2, 1999                          61.6        27.7  
June 10, 1999                         58.3        28.7  
June 16, 1999                         58.8        26.3  
June 24, 1999                         57.5        26.5 
June 30, 1999                         55.8        25.7 *  
 




 

Market Posture
**************
As of Market Close – Friday, July 2, 1999 

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

DOW Industrials   10,500  11,000  11,139    BULLISH   7.1
SPX S&P 500        1,315   1,355   1,391    BULLISH   7.1
OEX S&P 100          660     690     716    BULLISH   6.29
RUT Russell 2000     390     450     457    BULLISH   6.29

NDX NASD 100       2,110   2,220   2,348    BULLISH   6.29
MSH High Tech      1,010   1,080   1,182    BULLISH   6.19
        
XCI Hardware         900     950   1,014    BEARISH   6.17
CWX Software         675     700     797    BULLISH   6.17
SOX Semiconductor    410     425     493    BULLISH   6.10
NWX Networking       525     545     596    BULLISH   6.25
INX Internet         500     510     556    BULLISH   7.1

BIX Banking          680     720     715    Neutral   6.29
XBD Brokerage        410     425     439    BULLISH   7.1
IUX Insurance        645     660     658    Neutral   6.29

RLX Retail           900     910     943    BULLISH   6.29
DRG Drug             375     400     380    Neutral   7.1
HCX Healthcare       750     800     776    Neutral   7.1
XAL Airline          180     190     171    BEARISH   5.21
OIX Oil & Gas        285     310     302    Neutral   5.13

Posture Alert

Favorable Fed's action and employment report has the market 
closing the week on a strong bullish note before the long
holiday weekend.  We remain bullish across broad market
indices and most industry sectors.

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

/members/marketposture




Coming Events
*************

Monday: 

Sleep late, study the newsletter, markets closed.

Tuesday:

NAPM Non-manuf.     Jun    Forecast:  --     Previous: 60.0

Wednesday:

BTM Schroders       7/03   Forecast:  --     Previous: -0.4%
LJR Redbook         7/03   Forecast:  --     Previous: -0.6%
API Oil Stocks      7/02   Forecast:  --     Previous: -488K  

Thursday:

Jobless Claims      7/03   Forecast:  --     Previous: 268K 
Wholesale Inventory May    Forecast:  --     Previous: 0.2% 
Consumer Credit     May    Forecast:  $5.5B  Previous: $3.7B 
Money Supply (M2)   6/28   Forecast:  ---    Previous: $2.8B 

Friday:

None Scheduled






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





The Option Investor Newsletter              7-4-99
Sunday                   2  of  7



*************************
Whatever happened to....
*************************

Have you ever wondered what happened to the 56 men who signed the
Declaration of Independence?
 
Five signers were captured by the British as traitors, and tortured 
before  they died. Twelve had their homes ransacked and burned. Two 
lost their sons serving in the Revolutionary Army, another had two 
sons captured.  Nine of the 56 fought and died from wounds or 
hardships of the Revolutionary War.
 
They signed and they pledged their lives, their fortunes, and their 
sacred honor. What kind of men were they?
 
Twenty-four were lawyers and jurists. Eleven were merchants, nine were
farmers and large plantation owners; men of means, well educated. But
they signed the Declaration of Independence knowing full well that the
penalty would be death if they were captured.
 
Carter Braxton of Virginia, a wealthy planter and trader, saw his ships
swept from the seas by the British Navy. He sold his home and properties
to pay his debts, and died in rags.
 
Thomas McKeam was so hounded by the British that he was forced to move 
his family almost constantly. He served in the Congress without pay, 
and his family was kept in hiding. His possessions were taken from him, 
and poverty was his reward.
 
Vandals or soldiers looted the properties of Dillery, Hall, Clymer, 
Alton, Gwinnett, Heyward, Ruttledge, and Middleton.
 
At the battle of Yorktown, Thomas Nelson, Jr., noted that the British
General Cornwallis had taken over the Nelson home for his headquarters. 
He quietly urged General George Washington to open fire. The home was
destroyed, and Nelson died bankrupt.
 
Francis Lewis had his home and properties destroyed. The enemy jailed 
his wife, and she died within a few months.
 
John Hart was driven from his wife's bedside as she was dying. Their 13
children fled for their lives. His fields and his gristmill were laid to
waste. For more than a year he lived in forests and caves, returning home
to find his wife dead and his children vanished. A few weeks later he
died from exhaustion and a broken heart. Norris and Livingston suffered
similar fates.
 
Such were the stories and sacrifices of the American Revolution. These
were not wild eyed, rabble-rousing ruffians. They were soft-spoken men 
of means and education. They had security, but they valued liberty more.
Standing tall, straight, and unwavering, they pledged: "For the support 
of this declaration, with firm reliance on the protection of the divine
providence, we mutually pledge to each other, our lives, our fortunes, 
and our sacred honor."
 
They gave you and me a free and independent America. The history books
never told you a lot of what happened in the Revolutionary War. We 
didn't just fight the British. We were British subjects at that time 
and we fought our own government! Some of us take these liberties so 
much for granted...We shouldn't.
 
So, take a couple of minutes while enjoying your 4th of July holiday 
and silently thank these patriots. It's not much to ask for the price 
they paid..............


*************************
Option Clubs
*************************


Expansion and New Beginnings from coast to coast

Contact Support - New England
UPDATE ON MEMBERSHIP: We now have 33 members from all over New England. 
At our last meeting, people drove in from Connecticut, Maine, Rhode 
Island and New Hampshire.Next meeting we even have one new member who 
is going to fly his plane into a nearby airfield!!! And the really cool 
thing is that we're getting so many knowledgeable traders and investors 
that we are able to pull presentations from the membership that are 
successful and fun!

jwkas@cwnet.com Sacramento, CA
We had our first meeting on Saturday, and it was a great meeting. Indeed 
great things happen when great minds get together. We had three people 
at our first meeting. Some other people that we had expected did not show 
up. Those present decided that our next meeting should be a breakfast 
meeting. So our next meeting will be on Saturday July 17, from 8:00am 
to 9:30 am and one of the things we plan to do is discuss the bull-call 
spread strategy. After the meeting we all left very happy and encouraged. 
We exchanged phone numbers and promised to keep in touch. With such a 
supportive group I know we are going to make a lot of money!!!. Isn't 
that what it's all about?


Get involved Today!!!

 Organize@OptionInvestor.com or Visit@OptionInvestor.com



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

Index       Last    Week
Dow      11139.24  586.68
Nasdaq    2741.02  188.37
$OEX       716.28   44.99
$SPX      1391.22   75.91
$RUT       456.51   13.40
$TRAN     3515.99  199.88
$VIX        18.85   -1.42

Calls               Week

YHOO       178.13   31.38  Earnings on July 7th
BRCM       137.03   23.91  New, phenomenal growth rate
MSPG        48.63   19.69  New, old rumors and strong Net.
QCOM       144.25   17.50  Possible split candidate
UNPH       167.88   16.51  Talk about momentum
VRSN        84.94   16.44  Net stock revival
NSOL        83.50   12.06  New, revived by sector
CAH         69.69   10.88  New, marketing launch
SONE        47.19   10.19  New, strong earnings coming?
BBY         73.00    9.56  Added to the S&P500, strong growth
MMCN        49.50    9.50  Earnings run is in full swing
NOK         94.56    9.31  Upgraded on Friday, split cand.
IBM        132.25    9.13  Conservative play of Net
HWP        101.75    9.12  Buy rating and split cand.
SNE        112.75    8.56  52-week high for Nikkei and SNE
MOT         98.31    8.31  Last split was at $90, earnings soon
INTC        63.50    8.19  New, it's breaking out earnings run
DRIV        33.56    8.06  New, Strong sector
NT          90.56    7.13  Another split candidate
MSFT        92.00    7.06  Tighten up your stops
LU          70.69    7.00  Five straight up days, be careful
COF         56.69    6.50  New, off to the races
TXN        141.69    6.19  Sector showing strength
CSCO        67.06    5.81  Closed at all-time high
SGP         54.50    5.69  New, 20% earnings growth
CTXS        59.88    5.25  New, Revving up for earnings
SUNW        70.06    5.19  Possible breakout
PFE         38.63    4.81  New, drugs are recovering
TOM         76.38    4.75  New, splitting July 12th
VRIO        66.81    4.44  New powerful alliances
VISX        85.13    4.38  New, incredible growth ahead
SLR         67.13    4.31  Momentum beginning again?
ICIX        31.63    4.31  New, strong bounce
EFII        56.06    4.06  Big intraday swings
GTE         73.00    3.13  Dropped, underperforming
NXTL        49.19    2.75  Time for an earnings run
VOD        205.50    0.75  Rumor of 4-for-1 split

Puts

GBLX        40.00   -5.81  Losing to Qwset?
FON         50.13   -3.25  Possible Price War in Long distance
WLP         82.56   -2.81  Buy rating didn't help
AT          69.31   -2.81  New, deteriorating sector
AET         89.25    0.31  Consolidating for next move
MCK         32.25    1.25  More obstacles ahead
CI          92.44    5.13  Dropped, debt rating upgrade



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

With the bullish trend firmly in place we loaded the deck
again this weekend.

CALLS:

TOM  - Tommy Hilfiger
COF  - Capital One Financial
ICIX - Intermedia Communications
MSPG - Mindspring
SGP  - Schering Plough
CAH  - Cardinal Health
BRCM - Broadcom
VISX - Visx, Inc
DRIV - Digital River
SONE - Security First Technologies
NSOL - Network Solutions
CTXS - Citrix Systems
INTC - Intel Corp


PUTS: 

Please confirm downward motion before playing. With the
market in rally mode any beat up stock starts looking
like a value play.

AT   - Alltel Corporation


***************************
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:

GTE $73.00 (+3.19) GTE set a new all time high on Wednesday 
of $76.13, but profit takers had lopped off $3.13 from that high 
by Friday's close. Although GTE still saw a nice gain for the 
week, we are concerned that further gains will be limited in the 
near term by lowered earnings expectations for stocks in the 
long-distance group. First came a profit warning from Frontier 
on Monday night. Then on Wednesday, WCOM headed south after a 
Paine Webber analyst lowered his growth estimates for the company 
and another analyst suggested that intense long distance 
competition could dial up a price war. An anti-competitive probe 
concerning the undersea cable industry isn't helping, either. 
GTE was still bucking the trend in this group on Thursday, but 
it lost $1.13 Friday on strong volume. We are dropping GTE while 
we are still positive on the play in favor more promising options.


PUTS: 

CI $92.44 (+5.13) Cigna found it's way off our put list by 
selling its property-casualty insurance business to ACE.  It 
wasn't this act alone which caused the stock to rally more 
than $3.50 Friday but the $1.3 billion dollars that Cigna 
will report as a one-time gain didn't hurt either.  The sale 
was actually known about for some time but also on Friday 
Duff & Phelps and Standard & Poors raised the outlook on CI's 
debt.  This is because the debt level is reduced and cash 
available to fund current operations has increased.  This 
news is enough to keep the stock afloat over the short-term.  




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

TXN  - Texas Instruments
NT   - Northern Telecom
MOT  - Motorola
YHOO - Yahoo
NOK  - Nokia
VOD  - Vodaphone Airtouch (4:1 possible)
HWP  - Hewlett-Packard
QCOM - Qualcom
UNPH - Uniphase
BRCM - Broadcom

 

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

The number of splits has slowed down considerably but we
are sure to get another flood with the earnings announcements.

Symbol - Stock         Splits/Date  
TQNT - Triquent Semi   3:2 07-08-99 ex-date 07-09
VRTS - Veritas         2:1 07-08-99 ex-date 07-09
TOM  - Tommy Hilfiger  2:1 07-09-99 ex-date 07-12
CC   - Circuit City    2:1 07-15-99 ex-date 07-16
IPG  - Interpublic Grp 2:1 07-15-99 ex-date 07-16
LUV  - Southwest Air   3:2 07-19-99 ex-date 07-20
DISH - EchoStar        2:1 07-19-99 ex-date 07-20
TIF  - Tiffany CO.     2:1 07-21-99 ex-date 07-22
LCOS - Lycos           2:1 07-26-99 ex-date 07-27
AIG  - American Intl   5:4 07-30-99 ex-date 08-02


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 ! 
*******************************

None today


*******************************************************
THE PLAYS 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. 
*******************************************************

VOD - Vodaphone Group $205.50 (+.75)(-8.06) 
Possible 4:1 split announcement soon

See details in sector list

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

******

MSFT - Microsoft $92.00 (+7.06)(-0.06)(+6.87)(-1.43)
No trial for 90 days, earnings July-19th

See details in sector list

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

******

PFE - Pfizer $38.63 (+.92)(+.40)
Strong, cheap drug stock

See details in sector list

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

******

VISX - Visx, Inc $85.13 (+4.38)(+8.69)
Biotech broke out Friday - earnings in two weeks

See details in sector list

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


*********
Hardware
*********

HWP - Hewlett Packard $101.75 (+9.12)

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. 

HWP rallied with its sector this week.  On Monday it 
advanced $4.75 to move it beyond its comfortable support of 
$94-95 and pop it right over its 10 dma.  This was the 
first real sign of a positive uptrend.  The confirmation 
came on Wednesday when HWP reacted in a positive manner to 
the results of the FOMC meeting.  Big cap tech stock always 
have responded well to good interest rate news and HWP was 
no exception.  The stock tacked on another $3.12 to close 
smack on its daily high of $100.50!  HWP climbed even 
higher on Thursday setting yet another 52-week high as it hit 
$103.19 during intraday trading.  We expected the stock to 
pull-back a bit on Friday to offer an entry point.  HWP did 
settle back to $101 at its intraday bottom, but that's all 
the stock would give up.  Lehamn Brothers had reiterated a 
"buy' rating on HWP and set a $105 target price.  The 
market sentiment should continue to be positive next week 
so you may have to target shoot if you're interested in a 
lower entry price.  

[editor's note: HWP's last split was a 2:1 back in July
of 1996 around $80 to $85.  We are well above that level
now and HWP only has 1.01 bln shares outstanding.  Yet
they are authorized for up to 4.8 bln shares.  The possibility
of a split announcement near earnings is growing. - Kimo]

In company related news this week, HWP announced the 
termination of a long-time agreement with EMC to resell 
their Symmetrix storage systems - the decision was mutual.  
Also the company reported they are suing Xerox for patent 
infringement on their color laser printing technology.

**July options expire in 2 weeks**

BUY CALL JUL- 95 HWP-GS OI=2170 at $7.63 SL=6.00
BUY CALL JUL-100*HWP-GT OI=2779 at $4.00 SL=2.50
BUY CALL JUL-105 HWP-GA OI= 527 at $1.50 SL=0.75
BUY CALL AUG-100 HWP-HT OI=1750 at $7.25 SL=5.50
BUY CALL AUG-105 HWP-HA OI=1129 at $4.63 SL=3.00

Picked on July 1st at $102.00    PE = 27
Change since picked     -0.25    52 week high=$103.19
Analysts Ratings   7-10-8-0-0    52 week low =$ 47.06
Last earnings 04/99  est= .80    actual= .88   surprise=10%
Next earnings 08-16  est= .79    versus= .58
Average daily volume = 3.32 mln.
Chart = http://quote.yahoo.com/q?s=HWP&d=3m

*****

SUNW - Sun Microsystems $70.06 (+5.19)(+0.81)(+4.38)

UltraSPARCs, Netra servers, SPARCstations, and Solaris (for
Unix) are all products of Sun Microsystems.  Sun is also the
creator of the Java, a programming language designed to 
create software that can run unchanged on any kind of computer.
They are known for their saying, "The network is the computer."

SUNW came to the rally late but it showed up it full force 
on Friday.  We have been watching SUNW edge up all week.  It 
was stuck in a consolidation range between $65 and $68 but 
we finally got the breakout we've been waiting for.  It's 
interesting to note that some of the other blue chip tech 
stocks like LU and CSCO also spiked higher Friday despite 
relatively weak volume.  The lack of volume is from traders 
leaving for an early weekend.  Now we are left to wait and 
wonder what upside SUNW might have with some active trading.  
But it will be dependant on the market and since we have had 
a big run already, you would be wise to trail your stops just 
in case.  SUNW is now sitting only $2.44 from a new high and  
earnings are still 3 weeks away on July 22.  Their isn't a 
lot of specifics driving the stock right now and that just 
means we should see more of the same.  Which is SUNW moving 
with the sector and the NASDAQ.  For those interested in 
opening new plays, wait for a pullback before choosing an 
entry point.          
    
In the news on Thursday was an article about federal and state 
state officials launching a probe into Silicon Valley and 
perhaps some labor violations that may be going on.  A local 
paper broke the story earlier in the week that Asian immigrants 
might be the target of some companies for contract labor in 
which they are paid sometimes as low as a penny a part.  It's 
in the early stages of investigation but worth keeping an eye 
on.  We've seen this kind of thing get ugly in a hurry in the 
past.  SUNW was just one of a dozen companies mentioned but 
no one has been directly accused.   

**July options expire in 2 weeks**

BUY CALL JUL-65*SUQ-GM OI=10855 at $6.00 SL=4.25 wait for dip
BUY CALL JUL-70 SUQ-GN OI=14882 at $2.75 SL=1.50
BUY CALL JUL-75 SUQ-GO OI= 4497 at $0.88 SL=     risky play 
BUY CALL AUG-70 SUQ-HN OI= 2954 at $5.75 SL=4.00
BUY CALL AUG-75 SUQ-HO OI= 2516 at $3.38 SL=1.50

Picked on June 20th at   $64.06    P/E = 51
Change since picked       +6.00    52-week high=$72.50
Analysts Ratings      9-9-4-0-0    52-week low =$19.19
Last earnings 04/99 est=    .35    actual= .36
Next earnings 07/22 est=    .46    versus= .37
Average Daily Volume = 12.75 mln
Chart = http://quote.yahoo.com/q?s=SUNW&d=3m

*****

IBM - International Business Machines $132.25 (+8.75)(P2W+9.19)

Once again, anybody not know what IBM does? No? Good. Just in 
case, IBM is the granddaddy of the modern-day technology business.
They develop, make, and sell new technology, solutions, products 
including mainframes and PC's, computer services, and software, 
and they finance all of it. 

IBM has been on a run fueled by last quarter's strong earnings 
and a new focus on software and e-business applications.  Stock 
in the world's largest computer company is no longer crushed 
when revenues from areas like disk drive production come under 
competitive pricing pressure, as they are at present.  Investors 
know diversification will lesson any overall impact.  They also 
now see Big Blue as a conservative way to invest in the Internet, 
and that is helping the stock.  This past week, IBM hit a new 
intra-day high of $132.00 on Wednesday, following the Fed 
meeting. On Friday, it topped that high when it closed at 
$132.25, right at its high of the day.  This bodes well for a 
continuation of the run next week.  Volume was light Friday, 
but that is not unexpected for the day before a long holiday 
weekend.  Over the last 4 days, IBM has been up each day and 
has gained $9.69. The dip to $128.00 mid-day on Thursday may 
be all the near-term profit taking we will see in this stock 
as we head into earnings season, but DON'T COUNT ON IT. 
Meanwhile, although there has been some insider selling in June, 
all technical indicators are strongly positive.

In the news Thursday night, IBM announced a mini version on 
its MQSeries Business Messaging Software, which will be remote 
useable with hand-held devices. Meanwhile, overseas, the 
Japanese government has halted a plan by IBM and 24 other 
companies to open ATMs at convenience stores because it would 
violate laws preventing non-banking businesses from offering 
banking services. On Friday, IBM announced that it had won 
a $100 million plus contract to manage the Cigna Corp computer 
network for Ace LTD., which is acquiring Cigna. Overseas again, 
IBM and Pacific Electric Wire and Cable plan to invest $2.5 
billion to build two semi-conductor plants in Taiwan. Finally, 
the Clinton administration will ease computer export controls 
to many emerging markets including China and Russia.

**July options expire in 2 weeks**

BUY CALL JUL-130*IBM-GF OI=8680 at $4.00 SL=2.50
BUY CALL JUL-135 IBM-GG OI=4060 at $2.00 SL=1.00
BUY CALL AUG-135 IBM-HG OI=1922 at $6.75 SL=1.50
BUY CALL AUG-140 IBM-HH OI=1612 at $4.50 SL=2.75
BUY CALL OCT-140 IBM-JH OI= 435 at $8.00 SL=6.25

Picked on June 13th at $114.31    PE = 34
Change since picked   +$ 17.94    52 week low =$ 55.38 
Analysts Ratings    13-7-4-0-0    52 week high=$132.00 
Last earnings 03/99  est   .70    actual  .77 surprise=10%
Next earnings 08-09  est   .88    versus  .75 
Average daily volume = 5.81 mln.
Chart = http://quote.yahoo.com/q?s=IBM&d=3m


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









The Option Investor Newsletter          7-4-99
Sunday             Part 3 of 7


MMCN - MMC Networks, Inc. $49.50 (+$9.50)

MMCN is in the computer peripherals sector. The company 
develops and supplies Network Processors. These high-
performance, software-programmable processors form the 
core silicon "engines" of LAN and WAN switches and routers. 
The PS1000 for Fast Ethernet networks, the ATMS2000 for 
asynchronous transfer mode networks, and the AnyFlow 5000 
modular processors for network flexibility are some of the 
company's products. Although most of MMCN's sales come from 
within the US, the company also operates in Asia, Europe, the 
Middle East, and North America.

MMCM had a very strong week, adding on $9.50.  Most of 
the gains came after the Fed announcement Wednesday, picking
up almost 25% in two days.  Even though volume was light for 
the broader market on Friday, MMCN only gave  back $0.50 on
better than average volume of 625K.  Caution could still be 
the word on MMCN.  It  had a great June gaining  $24.50 from 
its low of $26.00 on June 4th.  So what do we see for this one?  
There appears to be more room to move up. Earnings are scheduled 
to reported July 15 and by all indications they should be better 
than last quarter and ahead of the same period one year ago.  
Remember to keep your stops tight.  MMCN doesn't have a lot of
intraday movement except upward.  If it does roll over, it is 
likely to fall very fast.  . These markets seem to want to run 
higher, however as we all realize they can "turn on a dime" Look 
for a dip with a strong intraday bottom before entering any 
new plays (if you can).  MMCN has not offered a lot of "dip".
Plan your entry carefully and do NOT hold over earnings.
 
News: Not much in the way of any news. We would look for more
analysts to reiterate or upgrade their ratings as MMCN has 
already surpassed most of the 12-month price targets of $45.00

**July options expire in 2 weeks**

Be careful option volume is low

BUY CALL JUL-45*CMQ-GI OI=100 at $5.88 SL=$4.25 vol=83 Fri.
BUY CALL AUG-45 CMQ-HI OI= 12 at $8.75 SL=$6.50
(45s are currently the highest calls available)

Picked on June 25th at $40.00    PE = 111
Change since picked + $  9.50    52 week high=$50.50
Analysts Ratings    3-4-0-0-0    52 week low =$  7.75
Last earnings 04/99  est 0.04    actual 0.10
Next earnings 07-15  est 0.11    versus 0.06
Average Daily Volume = 546 K
Chart = http://quote.yahoo.com/q?s=MMCN&d=3m

*****

EFII - Electronics for Imaging $56.06 (+4.06)(+3.06)

Electronics For Imaging (EFI) makes hardware-and-software systems 
that link computer networks to color copiers or desktop laser 
printers, enabling users to create high-quality color documents 
in their offices.  EFI's Fiery line of products includes servers 
for both the low and high ends of the color printing market, and 
color controllers that are integrated into copiers and desktop 
printers to facilitate color printing.  The company also makes a 
system for use with OCE Printing Systems' high-speed black-and-
white printers.  Copier makers Canon, Xerox, and Ricoh together 
account for 85% of EFI's sales.  More than half its sales are 
outside the US. (Description form Hoover's Online)

Another day, another new high (yawn).  On such low volume (only 
40% of normal), the gain is suspect, though it did close at its 
high of the day.  Nobody was in line to sell, but then again, 
nobody was in line to buy either.  While the technical chart got 
a boost on Friday as EFII close up $1.81, without volume, it 
walks on slippery rocks.  Nonetheless, a gain is a gain and EFII 
should continue up with the rest of the market.  Near-term 
support is at $53.  Stop losses on EFII are dangerous.  It's 
dangerous to trade with them because of the huge intraday swings
lately.  Of course it is always dangerous to trade without them
encase that is not just an intraday swing but a new trend.  
Place yours according to your own level of risk or security.
These same dips may also be a buying opportunity.  Check the 5 or 
10 day chart to see what we mean.  With only 32 mln. shares 
outstanding, price moves are exaggerated in both directions.  
Earnings are tentatively scheduled on July 15.  Remember to sell 
your position prior to that.  Otherwise confirm market direction 
before starting a new play.

Nothing new since Thursday, but here's repeat of the bullish 
sentiment from a Bloomberg article: Prudential Securities analyst 
B. Alex Henderson reiterated his "strong buy" rating on the maker 
of color desktop-publishing computer systems.  "The outlook and 
the competitive position of the company has not looked 
stronger," Henderson wrote in a note to investors. The shares are 
"considerably undervalued," he wrote.  You decide.  

*Note there are FEW total OI listed for all AUG strikes combined.  
Play only if it fits your risk profile.  Remember, this is a July 
earnings play.

**July options expire in 2 weeks**

BUY CALL JUL-50 EFQ-GJ OI=742 at $7.00 SL=5.25
BUY CALL JUL-55*EFQ-GK OI=454 at $3.75 SL=2.00
BUY CALL JUL-60 EFQ-GL OI=  3 at $1.56 SL=0.75 risky!
BUY CALL AUG-55 EFQ-HK OI= 30 at $6.25 SL=4.50
BUY CALL AUG-60 EFQ-HL OI=  3 at $3.88 SL=2.25 risky!
BUY CALL OCT-55 EFQ-JK OI=107 at $8.50 SL=6.50

Picked on June 27 at  $52.00    PE = 50
Change since picked    +4.06    52 week low =$13.50
Analysts Ratings   4-2-0-0-0    52 week high=$56.81
Last earnings 04/99 est 0.25    actual 0.31 surprise = 24%
Next earnings 07-15 est 0.34    versus 0.14
Average daily volume = 830 K 
Chart = http://quote.yahoo.com/q?s=EFII&d=3m

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

YHOO - YAHOO! Inc $178.13 (+33.69)(+9.19)(-12.19)

Yahoo! Inc is a global Internet media company that offers 
an online guide to web navigation, a branded network of 
comprehensive information, communication services, and 
shopping access to millions of users daily.  Yahoo! can lay 
claim to the top spot among Internet portals.  The Web site 
gets nearly 31 million visitors each month.  It's also one 
of the few Internet players operating in the black.  The 
bulk of Yahoo's revenue comes from its 3800 advertisers and 
their banners.  Presently Yahoo! is working on a deal with 
Broadcast.com which will give them access to Web-based 
audio and video.

It's true they say the Internets just aren't packing the 
power they did back in April.  But guess what, they're 
still very profitable and YHOO is a prime example.  In just 
5 days, YHOO has increased it's stock price by 23%!  The 
resurgence once again picked up momentum on Monday 
afternoon and continued through Thursday on the encouraging 
report by Greenspan.  Wednesday was the stellar day as the 
stock advanced into the double-digits with a $12.25 
increase.  Pacific Crest also started coverage on YHOO with 
a new "buy" rating.  Friday YHOO held steady with only a 
fractional gain.  Some high-risk players may have used this 
lull as an entry for a 1 to 2-day play.   However, I must 
remind you again.  This is purely an earnings' run play. 
No matter how promising the outlook for the 2Q report, 
please consider closing out your positions if you haven't 
already.  The earnings' report is on Wednesday, July 7th 
and it's very risky to hold over an announcement.  Many 
stocks suffer a decline due to profit taking or news events 
coming in from left field.  Keep in mind, you can always 
buy back in at a later time.  

[editor's note: current rumors for YHOO expect the company
to beat estimates of $0.08 with $0.15.  We still do not
recommend holding over earnings.  Plus, look at the last
earnings cycle.  Two days ahead of earnings YHOO was near
$180.  The next day (or the day before earnings) YHOO
jumped to about $215. Over $200 we can consider YHOO a 
split candidate.  Now I am not saying YHOO is going to hit
$200 on Tuesday but the bias is up.  Please note the
drastic decline after earnings.  Do NOT hold over!  I know
several traders looking to short or buy puts the day after
or two days after the announcement if the opportunity 
presents itself.  Good luck - Kimo]

In Yahoo! news this week, they announced that "phase 1" of 
their integration with GeoCities, an Internet publishing 
tool company, has been completed.  Also, they unveiled 
their customizable browser toolbar, Yahoo! Companion, which 
can be used from anywhere on the Internet.  Thursday was 
the big day for news.  The extended marketing agreement 
between Yahoo! and Proctor & Gamble was well received. 
Investors liked the advertising deal and YHOO added on more 
profits.

**July options expire in 2 weeks**

**** WARNING - TWO DAY PLAYS ONLY *******
BUY CALL JUL-170*YHV-GN OI=5175 at $17.75 SL=14.00 higher delta
BUY CALL JUL-175 YHV-GO OI=2864 at $15.63 SL=12.25
BUY CALL JUL-180 YHV-GP OI=6230 at $13.25 SL=10.75
BUY CALL JUL-190 YHV-GR OI=3491 at $ 9.63 SL= 7.00 gamblers only
BUY CALL AUG-190 YHV-HR OI= 212 at $18.75 SL=15.00

Picked on June 13th at $135.25    PE = 1893
Change since picked     +42.88    52 week high=$244.00
Analysts Ratings    7-11-6-0-0    52 week low =$ 27.75
Last earnings   03/99 est= .08    actual= .11   surprise=37.50%
Next earnings   07-07 est= .08    versus= .01
Average daily volume = 8.51 mln.
Chart = http://quote.yahoo.com/q?s=YHOO&d=3m

*****

NSOL - Network Solutions $83.50 (+12.06)

NSOL is a registrar of Internet addresses within the .com, 
.org, .net and .edu top-level domains.  They were the only 
registrar until April 1999 when the US government opened 
the market to competition.  Now Network Solutions has an 
amended cooperative agreement with the Department of 
Commerce.  To offset the cut into its monopolized revenues, 
NSOL is putting more focus on network engineering, security 
services, and on-line marketing.  R&D powerhouse Science 
Applications International owns 45% of Network Solutions 
and controls 90% of the voting power.

After months of declining, NSOL bottomed out in the mid-
50's by the first week in June; a rocky recovery ensued. 
By the end of the month the stock found relative support in 
the low 70's.  Then this past week NSOL revived itself once 
again to rally with its sector.  On Monday, the stock 
jumped up over $4 and the rest of the week is history.  The 
advances have been consistent, but as the broken record 
keeps repeating "the volume is lower than normal".  
Technically, the 10 dma is way back at $75 and the 
indicators are positive.  Nevertheless, it imperative that 
you confirm direction and sentiment before you begin a new 
play.  The real test will be to see NSOL break through its
100 dma at $83.50.  Conservative players should wait for
this to occur.  Pay attention to YHOO's earnings on Wednesday
as it will set the tone for the Internet sector this season.
Also stop losses can be a useful tool to protect capital and 
profits but they are tough to play on a stock like NSOL because
of the huge intraday swings.  Be careful.

News of hackers tampering with Network Solutions servers 
hit the press this week.  Apparently no damage was 
incurred, but the nature of this criminal offense is 
currently under investigation.

**July options expire in 2 weeks**

BUY CALL JUL-80*JNQ-GP OI=699 at $ 6.88 SL=5.25 short term
BUY CALL JUL-85 JNQ-GQ OI=627 at $ 4.00 SL=2.50
BUY CALL JUL-90 JNQ-GR OI=644 at $ 2.38 SL=1.25 risky play
BUY CALL AUG-80 JNQ-HP OI=584 at $11.63 SL=9.25
BUY CALL AUG-85*JNQ-HQ OI=246 at $ 9.25 SL=7.00 earnings play

Picked on July 4th at $83.50    PE = 193
Change since picked    +0.00    52 week high=$153.75
Analysts Ratings   4-5-0-0-0    52 week low =$ 11.00
Last earnings 03/99 est= .12    actual= .14 surprise=16.67%
Next earnings 07-30 est= .16    versus= .08
Average daily volume = 1.92 mln.
Chart = http://quote.yahoo.com/q?s=NSOL&d=3m

*****

VRSN - Verisign, Inc. $84.94 (+16.44)(+2.56) 

VeriSign provides digital IDs (also called digital certificates) 
with encrypted information to protect access to communications 
and transactions sent over the Internet, intranets, and extranets. 
The company has worked with Microsoft and Visa, among other 
companies, to deploy its cyber safeguards for such online 
activities as e-mail, home banking, and credit card purchases. 
Most of its revenues are from the sales of digital IDs.  VeriSign 
also markets its products to large firms and government agencies 
and provides digital certification services to such companies as 
Visa (14% of sales). 

Wow, what a week.  VRSN gained 24% during the last five trading
days.  VRSN broke above resistance last week at $73 and has
since looked very strong.  VRSN has been the beneficiary of 
not only the Internet comeback, but of the increased concern
of security on the Net.  Fortunately, both the net stocks revival
along with a renewed enthusiasm for earnings has re-awakened
this winner.  With such a strong week, VRSN may need to 
consolidate and trade sideways or bounce off its 10 dma again.
However, if YHOO blows past estimates on Wednesday (after
the bell) the whole Internet sector should do very well.
Mild support is in the $79 to $80 range while resistance is
at its 52 week high near $94.  Your entry point can be very
important with a volatile stock like this one.

No new news other than a number of new alliances.

**July options expire in 2 weeks**

BUY CALL JUL-80 YVR-GP OI=266 at $ 8.88 SL= 6.75 ITM $4.94
BUY CALL AUG-80 YVR-HP OI=223 at $14.38 SL=11.50 ITM $4.94
BUY CALL AUG-85 YVR-HQ OI= 11 at $12.13 SL= 9.75
BUY CALL AUG-90*YVR-HR OI=  3 at $ 9.88 SL= 7.50 vol = 104 Fri.
(80's are highest current July strike)

Picked on June 24th at $72.94    PE = 7300 
Change since picked    +12.00    52 week low =$ 9.69 
Analysts Ratings    5-6-3-0-0    52 week high=$94.13 
Last earnings 04/99 est -0.03    actual -0.04 
Next earnings 07-22 est -0.02    versus -0.12 
Average daily volume = 1.18 mln. 
Chart = http://quote.yahoo.com/q?s=VRSN&d=3m

*****

DRIV - Digital River Inc. $33.56 (+8.06)

Digital River takes the rough water out of online sales.  The 
company manages online stores for software publishers and 
retailers, creating and maintaining personalized Web stores 
that sell software.  Online shoppers interested in purchasing 
software are transferred to the Digital River site (the company
replicates client Web sites so that buyers are unaware they've 
been transferred to Digital River), where they make purchases 
that Digital River processes and fills.  The majority of sales 
come through software publisher clients.  The company also 
offers merchandising, marketing, and distribution services. 
Customers include Corel, Cyberian Outpost, Micro Warehouse, and 
Wal-Mart. 

How does a 31.6% gain sound?  That's what DRIV achieved last
week.  This is strong, but we feel it won't stop here.  DRIV
is still almost $30 from its 52 week high.  DRIV is another
stock that broke its 50-dma last week, tested it and then went
higher.  We really like this chart pattern.  DRIV had a 746
percent revenue increase between 1997 and 1998 and continues
to thrive on new e-commerce businesses.  Earnings are expected
in a few weeks and as Internet companies announce strong
earnings, this should help push DRIV even higher (watch YHOO's
earnings on Wednesday).

DRIV signed an agreement with Sega of America to provide Web
store hosting for the company.  This will allow Sega to 
concentrate on what they do best, and leave the e-commerce
infrastructure to DRIV.  DRIV has shown a classic uptrend
chart, as volume is higher on up days and light on down
days.  

**July options expire in 2 weeks**

BUY CALL JUL-30*DQI-GF OI=705 at $4.75 SL=3.50 ITM $3.56 
BUY CALL JUL-35 DQI-GG OI=549 at $2.00 SL=1.00 
BUY CALL AUG-30 DQI-HF OI=194 at $7.00 SL=5.25 ITM $3.56 
BUY CALL AUG-35 DQI-HG OI= 11 at $4.63 SL=3.50 

Picked on July 3rd at  $33.56    PE = n/a 
Change since picked     +0.00    52 week low =$ 5.00 
Analysts Ratings    6-2-1-0-0    52 week high=$61.38 
Last earnings 04/99 est -0.29    actual -0.27 
Next earnings 07-21 est -0.31    versus ?????
Average daily volume = 801 K 
Chart = http://quote.yahoo.com/q?s=DRIV&d=3m

*****

VRIO - Verio Inc $66.81 (+4.13)(+7.50)

Verio is a national provider of Internet services to 
primarily small and medium sized business.  With a huge wad 
of cash from a host of venture-capital firms and an IPO, 
Verio is buying regional and local Internet service 
providers (ISPs) across the US. It owns or has majority 
stakes in more than 35 business-oriented providers across 
the US. Verio is buying ISPs with a large number of 
dedicated accounts (business accounts with direct lines to 
the provider). The firm's customers include General 
Electric, Microsoft, Princeton University, and Ziff-Davis. 
Brooks Fiber Properties, a unit of MCI WorldCom, owns 
approximately 17% of Verio.

When we first picked up this play last Sunday we 
recommended patience and looking for more "bullish" 
confirmation before opening a new position.  We suggested a 
conservative player to wait for VRIO to break through $64 
as it was considered old resistance.  On Monday we saw our 
first sign as VRIO closed a fraction above its old 
resistance at $64.25.  The following day further 
corroboration presented itself as the stock never dipped 
below $64 and peaked as high as $67.25.  However, the 
trading volume was only at about half its normal levels.  
With the exception of Wednesday, this has been the case 
during this run-up.  Nonetheless, investors like the 
powerful alliances that Verio recently established with AOL 
and MSFT putting VRIO in upswing mode.  Verio has now 
securely positioned itself as leading-edge in this hot Web-
hosting business.  It's difficult to determine a solid 
support level, but it appears it may be forming around $67-
69 since VRIO tapered off Thursday and Friday.  Take a look 
at a 10-day chart for visual analysis.  The pullback on 
Friday may serve a nice entry point for next week.  For the 
new readers, confirm stock direction and market sentiment 
before you consider beginning a new play.  The stock has 
surpassed its 10 dma around $64 and faces overhead 
resistance at $78, its 52-week high.   Consider putting 
stops in place to protect your positions against market 
reversals and profit-taking.  

In the news on Monday, Verio's Web-hosting packages and 
VeriSign's digital certificates, which are basically 
Internet security packages for communications and 
transactions between sites and individuals, announced a 
pact to provide integrated services.   

**July options expire in 2 weeks**

BUY CALL JUL-60 RLQ-GL OI= 227 at $7.63 SL=6.00
BUY CALL JUL-65*RLQ-GM OI=1261 at $4.00 SL=2.50
BUY CALL JUL-70 RLQ-GN OI= 281 at $1.75 SL=1.00
BUY CALL AUG-65 RLQ-HM OI= 631 at $7.88 SL=6.25
BUY CALL AUG-70 RLQ-HN OI= 503 at $5.63 SL=4.00

Picked on June 27 at    $62.68    PE = N/A
Change since picked      +4.13    52 week high=$78.00
Analysts Ratings     6-2-1-0-0    52 week low =$13.00
Last earnings 03/99 est= -1.31    actual= -1.24 surprise=5.34%
Next earnings 08-20 est= -1.30    versus= -1.33
Average daily volume = 913 K
Chart = http://quote.yahoo.com/q?s=VRIO&d=3m

*****

MSPG - Mindspring $48.63 (+9.85 Split Adjusted)

MindSpring Enterprises relies on acquisitions to spring into the 
top tier of US ISPs.  With more than one million subscribers 
throughout the US, MindSpring rivals EarthLink for the #4 spot 
behind industry titan American Online (17 million accounts), the 
Microsoft Network, and AT&T WorldNet.  Dial-up Internet access 
offerings account for nearly 85% of MindSpring's sales.  The 
company also provides Web hosting (45,000 accounts) and dedicated 
access lines for business customers.  MindSpring, working to 
maintain its reputation for outstanding customer service as it 
grows, now offers high-speed cable modem Internet access over 
leased networks. (Description from Hoover's Online)

MSPG has been on a charging-bull snort since mid-June.  Not even 
the typical split depression could get hold of MSPG following its 
2:1 split last Monday.  A lot of hype surrounds the ISP industry, 
now that AOL has bought 10% of e-machines, a sub-$500 PC box 
manufacturer.  Rumors that Earthlink may be bought by Gateway 
have spurred some pundits to speculate that Dell may acquire 
MSPG.  That's the rumor, not the fact.  Nonetheless, it hasn't 
stopped MSPG from springing up the chart in technically bullish 
fashion.  The technical chart is maximum positive after showing 6 
straight days of gains.  Of course we have an obligation to 
remind you that nothing goes up in a straight line and some 
taking of the profit is due.  With volume far in excess of 
average, down days have been sparse.  That said, consider the 
dips a buying opportunity until any buyout announcement is made.  
Near-term support is $44.  It may help to note that MSPG has been 
gapping up at the open, which leads us to believe that buying at 
the close and selling at the open might make us some money.  
DON'T DO THIS JUST BECAUSE WE SAID IT!!  You still need to do 
your homework and look for a good entry consistent with your risk 
profile.  As always, confirm market direction before starting a 
new play.

Well, there's a pessimist in every crowd, which is probably good 
considering that investors have lined up to get in to MSPG.  
Here's the cold shower: MSPG was downgraded to "hold" from 
"accumulate" by analyst F. Drake Johnstone at Davenport & Co.  
The 12-month target price is $45.00 per share." (Bloomberg)  No 
other information was provided.

**July options expire in 2 weeks**

BUY CALL JUL-45 MQD-GI OI=2531 at $5.50 SL=3.75
BUY CALL JUL-50 MQD-GJ OI=2906 at $2.69 SL=1.25
BUY CALL AUG-50*MQD-HJ OI= 422 at $6.38 SL=4.50
BUY CALL OCT-50 MQD-JJ OI= 666 at $9.63 SL=7.25

Picked on June 29th at  $48.63    PE = 385
Change since picked      +0.00    52 week low =$11.56
Analysts Ratings     6-5-1-0-0    52 week high=$66.50
Last earnings   05/99 est 0.15    actual 0.16 surprise = 6.7%
Next earnings   07-28 est 0.17    versus 0.08
Average daily volume = 1.90 mln. 
Chart = http://quote.yahoo.com/q?s=MSPG&d=3m

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

MSFT - Microsoft $92.00 (+7.06)(-0.06)(+6.87)(-1.43)

Introducing the one and only, amazingly huge Microsoft!  Really, 
this company needs no introduction since it dominates the 
operating system Market with Windows 95, Windows 98 and Windows 
NT installations in over 90% of PC's shipped.  They are also the 
makers of Word, Excel, and Power Point.  (All other inquiries 
should be directed toward their legal council!)

The trial's over and the Judge will not render a verdict for a 
few months.  Now what?  We offer the familiar refrain, "earnings 
will not be affected by any decision".  Now to the meat of the 
play.  Earnings are July 19 (company confirmed).  MSFT has traded 
up 6 days in a row, and in another day or 2, will likely see 
profit taking, especially since its up $7 in this current trend.  
No need for panic - mild support is around $90.  The technical 
chart is deep in the positive territory.  Despite weak volume on 
Friday, MSFT held $91.50 after the first 2.5 hours of trading.  
In our book, that's good because it tells us that despite an 
extended weekend following a strong week, there was no line to 
cash in the chips.  If it helps you feel better, note too that 
there are over 61,000 open interests in the July 95 and 100 
strike prices, telegraphing that investors expect MSFT to go 
higher than its current $92.  In short, if you are sitting on a 
mountain of profit, don't give it back, keep a tighter reign on 
your stop order unless you can stomach the dips.  Otherwise, 
buy the dip.  As always confirm market direction before starting 
a new play.

In the news, MSFT released its latest test version of Windows 
2000.  The final release is still on schedule for later this 
year.  Second, MSFT will use Real Network's technology in its 
WebTV and in Windows CE.  MSFT and RNWK had previously been at 
battle over the audio/video delivery technology in the digital 
age.  We guess that with the MSFT's tacit offering of the olive 
branch, this was not the hill they wanted to die on.  Third, MSFT 
announced they would purchase Sendit, a Swedish software firm 
that develops cellular communications software.  The acquisition 
"will result in products and technologies that give consumers 
access to information anytime, anywhere, from any device 
connected to the Internet" (Bloomberg).  Ala, wireless Internet.

**July options expire in 2 weeks**

BUY CALL JUL-85 MSQ-GQ OI=33008 at $ 7.75 SL=6.00
BUY CALL JUL-90*MSQ-GR OI=35503 at $ 3.75 SL=2.00 
BUY CALL JUL-95 MSQ-GS OI=31844 at $ 1.31 SL=0.75
BUY CALL AUG-90 MSQ-HR OI= 5493 at $ 6.50 SL=4.75
BUY CALL AUG-95 MSQ-HS OI= 5008 at $ 4.00 SL=2.50
BUY CALL OCT-95 MSQ-JS OI=13622 at $ 7.00 SL=5.25

Picked on June 20 at    $85.00    PE = 72
Change since picked      +7.00    52 week low =$43.88
Analysts Ratings   15-14-2-0-0    52 week high=$95.62
Last earnings   04/99 est 0.32    actual 0.35
Next earnings   07-19 est 0.35    versus 0.25
Average daily volume = 25.62 mln. 
Chart = http://quote.yahoo.com/q?s=MSFT&d=3m

*****

CTXS - Citrix Systems Inc $59.88 (+5.25)

Citrix provides application server products and technologies 
that allows networked computers to run Windows-based programs 
from a central server.  This gives their clients effective 
and efficient management of their applications.  Its WinFrame 
software is used by well-known companies such as Sears Tire 
Centers and Hewlett-Packard Europe.

This week in the market has been a haven for the tech 
stocks.  Many are setting new highs and revving up for 
earnings' season.  CTXS wasn't going to be left behind.  
The stock slipped away from its long-time support of $54 
and $56 at the start of the week and popped over its 10 dma 
of $56 by Thursday.  Every day CTXS edged higher setting 
new 52-week highs along the way!  The record presently 
stands at $60.25.  Beware of profit-takers at these new 
heights and consider using stops in case of an unexpected 
reversal.  Earnings are just around the bend on July 20th; 
keep this date in mind if you chose to play this stock.  
OIN never recommends holding over an earnings' announcement.  
The odds are never in your favor as most stocks will suddenly 
deflate after the fact.  

AG Edwards reiterated its "buy" rating for CTXS on Friday, 
but offered no other comments.  Earlier on June 24th, 
Lehman Brothers also reiterated a "buy" rating and set a 
$63 target price.  According to an article by the 
redherring.com, Citrix wants to be the Cisco of the ASP's 
(application service providers) and its founder and chairman, 
Edward Iacobucci, believes he can take the company there via 
the Internet.

**July options expire in 2 weeks**

BUY CALL JUL-55*XSQ-GK OI=800 at $6.13 SL=4.50 ITM
BUY CALL JUL-60*XSQ-GL OI=950 at $2.63 SL=1.50
BUY CALL JUL-65 XSQ-GM OI=124 at $1.00 SL=0.00
BUY CALL AUG-60 XSQ-HL OI=693 at $5.88 SL=4.25
BUY CALL AUG-65 XSQ-HM OI=191 at $3.88 SL=2.50

Picked on July 4th at $59.88    PE = 45
Change since picked    +0.00    52 week high=$60.25
Analysts Ratings   7-1-0-0-0    52 week low =$23.12
Last earnings 03/99 est= .27    actual= .28    surprise=3.7%
Next earnings 07-20 est= .31    versus= .19
Average daily volume = 2.01 mln.
Chart = http://quote.yahoo.com/q?s=CTXS&d=3m

*****

SONE - Security First Technologies $47.19 (+10.19)

Security First Technologies (S1) lets you do your banking in 
your pajamas.  The company makes software for performing 
Web-based financial transactions.  Its customizable Virtual 
Financial Manager suite enables bank customers to access accounts, 
pay bills, transfer money, open deposit accounts, track expenses, 
and make investments securely online.  S1 also offers training, 
consulting, and data service center outsourcing to customers, 
which include Citibank and Bank of America.  Its products are 
available directly and through partners such as Andersen 
Consulting and Hewlett-Packard.  S1, which is expanding through 
acquisitions, has sold the banking operations of its Security 
First Network Bank to Royal Bank of Canada. 

SONE had a phenomenal week as it gained 27.5%.  Of course the
Internet sector in general had a great week, but SONE was a
leader.  SONE was able to break its 50-dma last week and then
retest it.  We like to see this, because it let's us know
that the 50-dma has now become support.  The 50-dma is at $45
for SONE.  SONE has earnings at the end of the month, but should
still have a strong early July as other Internet stocks announce
strong earnings.  Though not your traditional banking company, 
SONE still benefited from the Fed's decision to raise rates just 
25 basis points and especially from the announcement of a 
"neutral" bias.  We feel SONE is in an industry that is still 
in its infancy and as more and more people start doing online 
banking, SONE will continue to benefit.  Especially now that
investors are more willing to bet on tech/internet stocks with
the Fed back to neutral.  Be careful of profit taking and 
watch dips for intraday bottoms as entry points.

**July options expire in 2 weeks**

BUY CALL JUL-45*QFB-GI OI=522 at $3.63 SL=2.00 short term 
BUY CALL JUL-50 QFB-GJ OI=217 at $1.31 SL=0.75 
BUY CALL AUG-45 QFB-HI OI= 60 at $6.75 SL=5.00 ITM $2.19 
BUY CALL AUG-50*QFB-HJ OI= 17 at $4.25 SL=3.00 caution=low OI

Picked on July 3rd at  $47.19    PE = n/a
Change since picked     +0.00    52 week low =$ 4.63 
Analysts Ratings    3-5-0-0-0    52 week high=$79.25 
Last earnings 05/99 est -0.14    actual -0.13 
Next earnings 07-28 est -0.11    versus -0.25 
Average daily volume = 624 K 
Chart = http://quote.yahoo.com/q?s=SONE&d=3m

*****************************
PLAYS CONTINUED IN SECTION FOUR.
*****************************
SEE DISCLAIMER IN SECTION ONE
*****************************





The Option Investor Newsletter             7-4-99
Sunday                4  of  7

**************
Semiconductors
**************
INTC - Intel Corp $63.50 (+8.19)

Intel designs, manufactures, and markets microprocessors 
Its star performer is the Pentium. It has been providing the 
microcomputer components for IBM-compatible PCs since 1981. 
With an overwhelming 85% of the market share, Intel is dominant 
in the semiconductor industry.  

Intel, the mother of chip makers, responded well to the 
final results and scuttlebutt surrounding the FOMC meeting.  
INTC left its comfortable support of $55 and $57 this week 
to venture upward.  On Thursday, it cleared its near 
resistance of $60 at an exceptional volume level of 30.82 
mln. shares being exchanged.  INTC confirmed its strength 
by holding this new position on Friday adding on a 
fractional gain.  This leader should continue to flourish 
if the market rallies next week.  This is a pure and simple
earnings play.  INTC announces earnings on Tuesday July 13th.
Again, we do not recommend holding over an earnings announcement.

Thursday was a day to pop open the champagne.  Intel 
announced that the $780 mln. merger with Dialogic received 
final regulatory approval.  Dialogic is a hardware and 
software company that builds corporate telecommunications 
systems that run on Intel-based network servers.  At first 
investors thought Intel was biting off more than it could 
chew, but the stock rallied on this latest news.  Plus, 
Intel, along with KLA-Tencor were named to the "uncommon 
value" list by Lehman Brothers.  The company also reported 
that their decision to move to a 300mm  wafer will cut 
manufacturing costs by 30%.  They cited more chips cut per 
larger wafer and fewer people to assist in the manufacturing 
process are the major contributing factors. 

**July options expire in 2 weeks**

BUY CALL JUL-60*INQ-GL OI=39336 at $4.63 SL=3.00
BUY CALL JUL-65 INQ-GM OI=28295 at $1.56 SL=0.75
BUY CALL AUG-65 INQ-HM OI= 6802 at $3.38 SL=1.75

Picked on July 4th at $63.50    PE = 26
Change since picked    +0.00    52 week high=$71.87
Analysts Ratings 16-13-7-0-0    52 week low =$34.87
Last earnings 03/99 est= .54    actual= .57 surprise=5.56%
Next earnings 07-13 est= .53    versus= .33
Average daily volume = 20.40 mln.
Chart = http://quote.yahoo.com/q?s= INTC&d=3m

*****

TXN - Texas Instruments $141.69 (+5.69)(+2.75)(+5.13)(+8.75)

Texas Instruments Incorporated provides semiconductor products 
worldwide, as well as designs and supplies digital signal 
processing solutions and analog integrated circuits.  The 
Company's semiconductor products include standard logic, 
application-specific integrated circuits, reduced instruction-
set computing microprocessors, and microcontrollers. 


TXN will report earnings on July 20 (company confirmed) and is 
also a split candidate.  Their last split (2:1) was in November 
1997 at about $100.  They do not currently have enough shares to 
make it happen and have yet to issue a proxy statement to 
shareholders for approval.  If they announce a split with 
earnings, it will take a while for it to actually become 
effective.  They certainly are not tipping their hand of their 
intent.  Communications equipment sector and the semiconductors 
are both still showing strength.  TXN had a nice gain this week, 
as did lots of other tech stocks.  Of course we offer the 
standard words of wisdom to be on the lookout for profit taking.  
Otherwise, TXN is looking pretty good.  Technicals are still 
positive.  Dips into the $139 range are met with willing buyers.  
Wasn't it last week when $139 meant resistance?  Yep, but not any 
more.  The top of the channel is now at $145.  We think intra-day 
dips are buyable and worth target shooting.  As always, keep 
stops in place if the trade moves beyond an acceptable dip.  With
Friday's (actually, Wednesday and Thursday too) market-wide 
strength, it's near the time for a down day.  Even split 
candidates on an earnings run won't go up in a straight line if 
the market turns down.  Confirm market direction first.

Not much news from Friday, just that fewer vendors will be doing 
more of the distribution, further reducing expenses.  Any good 
business will do this anyway. . .kind of like Babe Ruth making 
sure his shoes were tied before he went to bat.  It's important 
but doesn't change the course of history.

**July options expire in 2 weeks**

BUY CALL JUL-135 TXN-GG OI=1279 at $ 9.88 SL= 7.50
BUY CALL JUL-140*TXN-GU OI=2507 at $ 6.00 SL= 4.25
BUY CALL JUL-145 TXN-GW OI=1536 at $ 3.63 SL= 2.00
BUY CALL AUG-140 TXN-HU OI= 304 at $12.38 SL= 9.75
BUY CALL AUG-145 TXN-HU OI= 176 at $ 9.88 SL= 7.50

Picked on June 10th at $125.75    PE = 90
Change since picked     +15.94    52 week low =$ 45.38
Analysts Ratings    11-8-5-0-1    52 week high=$145.00
Last earnings   04/99 est 0.61    actual 0.65
Next earnings   07-20 est 0.76    versus 0.35
Average daily volume = 2.62 mln. 
Chart = http://quote.yahoo.com/q?s=TXN&d=3m

*****

BRCM - Broadcom Corp. $137.03 (+23.90)(+1.19)

Broadcom Corporation is a leading broadband semiconductor 
company based in Irvine, CA. It develops and manufactures chips 
that enable high-speed transmission of data over existing wires 
not originally designed for digital transmission. It has 
developed integrated circuits for cable modems, high speed 
networking, satellite and terrestrial digital broadcast, and 
xDSL(digital subscriber line) application. BRCM dominates the 
broadband cable set-top box and the cable modem markets. 
Customers include 3Com, Bay Networks, Cisco Systems, General 
Instruments, Motorola, and Scientific Atlanta. The recent 
acquisition will make it a leader in home networking.

A frequent visitor to our recommended list, BRCM is back just 
over 2 weeks ahead of its earnings date. BRCM has more than 
quadrupled since it went public April 17th of last year, and 
it gained 135% in the 3 month period ended June 30th. Last 
week the stock took off right after the neutral rate stance 
was announced by the Fed, adding about 18 points in under 2 
hours! On Thursday and Friday, it saw a little profit taking, 
but not a great amount relative to the gain it had made. It 
closed the week up $23.90. BRCM's products are at the cutting 
edge of technology in the communications and data transmission 
arena, a hot stock area. BRCM just split in February when it 
traded around $120 and it is well over that price now. This 
stock trades at a HUGE PE, but it is growing at a phenomenal 
rate and its price is based on growth. 

This news is a little old, but worthy of mention: The Street.
COM on June 21 noted that a possible Texas Instruments (TXN) 
acquisition of Libit Signal Processing, an Israeli communications 
chip company, might make TXN the first serious challenger to 
BRCM's leadership position in its chip niche. Also, On June 22, 
BRCM was given a new "buy" rating by C.E. Unterberg Tobin. 
Please be aware that BRCM has one foot in the Internet sector 
and the other in the chip sector, so it can see a LOT of 
volatility. Look for a good entry and stay on top of any BRCM 
positions you initiate. 

**July options expire in 2 weeks**

BUY CALL JUL-135 RDZ-GG OI=167 at $ 8.38 SL= 6.25
BUY CALL JUL-140*RDZ-GH OI=560 at $ 6.00 SL= 4.25
BUY CALL JUL-145 RDZ-GI OI= 38 at $ 4.13 SL= 1.50 aggressive
BUY CALL AUG-145 RDZ-HI OI= 11 at $11.75 SL= 9.25
BUY CALL AUG-150 RDZ-HJ OI= 16 at $ 9.75 SL= 7.25

Picked on July 4th at  $137.03    PE = n/a
Change since picked    +$ 0.00    52 week low =$ 23.50 
Analysts Ratings     2-6-1-0-0    52 week high=$145.25 
Last earnings 03/99   est  .14    actual  .19 surprise=36%
Next earnings 07-21   est  .17    versus  .08 
Average daily volume = 2.20 mln.
Chart = http://quote.yahoo.com/q?s=BRCM&d=3m

*****

SLR - Solectron $67.13 (+4.32)(-1.25)(+6.37)

Founded in 1977, Solectron is the largest OEM electronics 
contract manufacturer in the world. Throughout a range of 
industries including avionics, communications, industrial 
and medical instrumentation, and of course, consumer 
electronics and computers, Solectron provides product 
design and prototyping, assembly, packaging and warehousing. 
Hewlett-Packard, Cisco Systems, and Mitsubishi are among its 
customers. Solectron is the first company to twice win the 
Malcolm Baldrige Award, given for manufacturing excellence.

We are not giving up on SLR.  However , for the fourth day
in a row it fell short of breaking through its all time high set
on June 21st.  Volume was very light on Friday with only
679K shares exchanging hands. With the recent announcement
by the Fed and the amount of bullishness in the broader markets
we would like to have seen some follow through by SLR into
record territory.  It still could happen. $67.25 is the key number
to watch.  This was a momentum play from the start, although 
it might appear as though it's lost old "MO", it could simply have 
been misplaced for a few days.  If not, support is down at $60.00-
$62.00 if it falls through its 10 dma.  Fortunately SLR closed
on its high of the day on Friday.  If you are already 
profitable, consider tightening your stop losses if the market
corrects next week.  Otherwise, SLR is due for another move
the question is which direction.  Considering where it is
and what the market is doing we see it climbing next week with
the broader market.  

NEWS: It was announced Friday that the CEO and two directors
recently  sold stock to "diversify their portfolios".  Chairman
Koichi Nishimura exercised a stock option and sold  80,000
shares of common stock valued at about $5.2 million.  His stake
in Solectron now stands at about 764,428 shares, comprised of 
240,588 shares directly held and 523,840 options, a company 
spokesman said (Reuters). 

**July options expire in 2 weeks**

BUY CALL JUL-60 SLR-GL OI=930 at $7.88 SL=6.00 ITM	
BUY CALL JUL-65*SLR-GM OI=650 at $3.88 SL=2.25
BUY CALL JUL-70 SLR-GN OI=285 at $1.50 SL=0.75 risky
BUY CALL AUG-70 SLR-HN OI=125 at $3.50 SL=1.75

Picked on June 20th at $64.06       PE = 61
Change since picked + $  3.07       52 week high =$67.25
Analysts Ratings    6-6-6-0-0       52 week low=  $19.21
Last earnings   06/99 est .20       actual .29
Next earnings   09-14 est .32       versus .23
Average Daily Volume = 1.30 mln
Chart = http://quote.yahoo.com/q?s=SLR&d=3m

*********************************
Telecom/Communications/Networking
*********************************

CSCO - Cisco Systems $67.06 (+5.75)(+2.81 Split Adjusted)

Cisco's the big kid on the network block.  The leading supplier 
of products that link LANs and WANs, Cisco Systems controls about 
85% of the global market for routers and switches, which direct 
information on a network.  The company's other products include 
dial-up access servers and network management software.  Cisco is 
using acquisitions (more than 30 since 1993) to broaden its 
product line and is licensing products to widen the influence of 
its Cisco Internetwork Operating System (Cisco IOS) software, 
hoping to make it an industry standard.  Strategic relationships 
with the industry's biggest players (including Alcatel, 
Microsoft, Qwest, and U S WEST) are boosting Cisco's influence on 
the networking industry. (Description from Hoover's Online)

Wow! This is one good-looking technical chart - positive in all 
sections.  CSCO closed at another new all-time high of $67.06 
(also the high of the day) on Friday on higher than average 
volume.  This is the kind of strength we want to see from a play, 
especially considering there are over 3.2 bln. shares issued.  In 
retrospect, Thursday's action looks like that profit-taking 
thing, where the price wanted to fall, but the volume wouldn't 
allow it.  As sellers stepped in, buyers took it all and then 
some.  Since individual investors can't move a market like this, 
we suspect that institutional money is leaving the sidelines to 
be put to work in Cisco.  As the leader in the construction of 
the Internet backbone (in a strong sector too), we wouldn't be 
surprised.  Market willing, look for the trend to continue.  
Intra-day support is $66.  It's a little stronger at $64.  Target 
shoot your way in on any weakness.  Don't abandon caution.  Use 
stops just in case real profit taking sets in.  Not even CSCO can 
escape a broader market pullback, of which we're about due given 
last week's strength.  Earnings are on August 10 (company 
confirmed).

No news on Friday, except that the California and Federal 
government are investigating many high tech companies, including 
CSCO labor practices stemming from allegations that Asian 
immigrants are assembling electronics components at home -- 
sometimes for as little as a penny a part.  Sleep easy knowing 
that this is a non-event, merely a story looking for 
sensationalism.

**July options expire in 2 weeks**

BUY CALL JUL-65 CYQ-GM OI=23962 at $3.25 SL=1.75
BUY CALL JUL-70 CYQ-GN OI= 3631 at $0.69 SL=0.00
BUY CALL AUG-65 CYQ-HM OI= 6654 at $5.63 SL=3.75
BUY CALL AUG-70*CYQ-HN OI= 8152 at $2.81 SL=1.50

Picked on June 29th at  $62.50    PE = 111
Change since picked      +4.56    52 week low =$20.56
Analysts Ratings   19-12-0-0-1    52 week high=$67.06
Last earnings   05/99 est 0.37    actual 0.38 surprise = 2.7%
Next earnings   08-10 est 0.40    versus 0.32
Average daily volume =14.48 mln. 
Chart = http://quote.yahoo.com/q?s=CSCO&d=3m

*****

NXTL - Nextel Communications Inc $49.19 (+2.75)(+1.69)

Nextel is a digital and analog wireless communications 
service company.  They are increasing their presence in the 
industry with the help of equipment provider Motorola, who 
has a 24% stake, and wireless pioneer Craig McCaw, who has 
about a 20% stake.  The company is setting itself apart 
from its cellular competitors by undercutting its prices.  

This momentum play started the week off with a roar as it 
continued to tack on additional gains.  The vigorous volume 
pushed NXTL into new territory hitting new highs first on 
Tuesday then again on Wednesday.  The record is now at 
$50.75.  Last week the stock had established a support 
level at $44-46 and then flew the coop.  If the end of this 
week is any indication, NXTL may be consolidating at $48-49 
which is just above its most recent 10 dma.  Both Thursday 
and Friday NXTL never dipped below $48.63 and hit 
opposition at its resistance of about $50.  Bear in mind, 
NXTL left the $38 mark on June 15th and has consistently 
risen to these new levels on sheer momentum -  who can 
blame investors for wanting to cash in on some shares; plus 
consolidation in part of the natural stock cycle.  Since 
steep gains are always a factor to consider when planning 
your future plays, a conservative player may want to wait 
for another bounce before jumping into the game.
Remember, we only have about a week and a half before 
earnings for NXTL.  They might start a run soon.

Analysts views were mixed this week.  First, Prudential 
analyst, Christopher Larsen, reiterated a "strong buy" 
rating on NXTL and put a $59 target price on the stock.  
Then Davenport & Co cut NXTL to a "hold" from an "accumulate" 
today and set the 12-month target price at only $50. In 
other news, Nextel announced that they have acquired a 
multi-year contract with Metro One Telecommunications to 
provide them with directory assistance services.

**July options expire in 2 weeks**

BUY CALL JUL-45*FQC-GI OI=1096 at $4.88 SL=3.25
BUY CALL JUL-50 FQC-GJ OI=1586 at $1.44 SL=0.75
BUY CALL JUL-55 FQC-GK OI=   0 at $0.31 SL=0.00
BUY CALL AUG-50 FQC-HJ OI=2222 at $3.50 SL=1.75
BUY CALL AUG-55 FQC-HK OI=  25 at $1.69 SL=0.75

Picked on June 27 at    $46.44    PE = N/A
Change since picked      +2.75    52 week high=$50.75
Analysts Ratings    12-4-5-0-0    52 week low =$15.37
Last earnings 03/99 est= -1.43    actual= -1.37 surprise=4.20%
Next earnings 07-15 est= -1.36    versus= -1.45
Average daily volume = 5.20 mln.
Chart = http://quote.yahoo.com/q?s=NXTL&d=3m

*****

NT - Nortel Networks Corporation $90.56 (+7.13)

Nortel Networks, formerly Northern Telecom, pretty much does 
it all when it comes to digital telecommunications products. 
The company designs, develops, manufactures, markets, sells, 
finances, installs and services telecommunications systems. 
It is second in the world only to Lucent. 

Nortel has enjoyed a good month of gains, beginning the month
of June at $75.00, adding just under 21% to its market cap in the 
last 30 days.  June 21 marked a new high for NT at  $88.00. It 
pulled back as profit taking set in, which is not unusual.  What 
is impressive to us, is that Thursday; Nortel pushed through the 
$88.00 level of resistance like it wasn't even there on volume 
of 2.80 mln shares.  With average volume at 1.80 mln. this next 
move could be for real and not just a head fake.  The new 52-week 
high is $91.00 Again some profit taking or consolidation would
be normal here, but we are in earnings season again, and NT 
announces July 27th.  We would remind you again that the company 
split 2:1 in January of 1998 when it was close to the $100 level.  
With 668 mln shares issued and unlimited authorization, NT could 
be due for another split announcement. 

An article from (Reuters) on Friday showed Nortel stock hit a 
Canadian High on recent deals and comparison to others in its 
industry.  An analyst who covers the company but declined to be 
identified, said "Nortel's stock price was cheaper than Lucent's 
on a price to earnings basis."  "Investors have woke up to the 
fact that Nortel is among the biggest worldwide in the field of 
communications and Internet equipment makers."  Wednesday NT won 
a three-year contract from Qwest worth 600 mln. for fiber-optic
equipment.  Friday Nortel unveiled a $175 million deal with 
Taiwan's biggest mobile service provider, Chunghwa Telecom. 

**July options expire in 2 weeks**
 
BUY CALL JUL-85 NT-GQ OI=1057 at $6.25 SL=4.75
BUY CALL JUL-90*NT-GR OI= 826 at $3.00 SL=1.75
BUY CALL AUG-85 NT-HQ OI= 482 at $8.75 SL=6.50 
BUY CALL AUG-90 NT-HR OI= 318 at $6.00 SL=4.50

Picked on May 23rd at $79.94    PE = N/A
Change since picked +$ 10.62    52 week high=$91.00
Analysts Ratings  7-13-6-0-0    52 week low =$26.81
Last earnings 04/99 est 0.27    actual 0.33 
Next earnings 07-27 est 0.50    versus 0.41
Average Daily Volume = 1.80 mln
Chart = http://quote.yahoo.com/q?s=NT&d=3m

*****

MOT - Motorola, Inc. $98.31 (+$8.31)

Motorola is a communications/electronics giant. It is 
fighting Nokia and Ericsson for the number one ranking among 
mobile phone makers. Its cellular products make up close to 
40% of its sales. But, Motorola also manufactures and sells 
other products that range from communications systems, 
semiconductors, and electronic engine controls to computer 
systems, two-way radios, and pagers. With operations in 
approximately 40 countries, it gets close to half of its 
sales from outside the US. 

Back in the middle of June, MOT broke out of a $12.00 trading
range that it had been in since early April.  What is impressive
here is that it made its recent move up on solid volume.
It made a new intraday and 52 week high of $99.13 on Friday. 
Volume was a bit light at 1.92 mln. shares.  In the past when
its moved to new highs, it promptly falls back to support, 
consolidates and starts all over again.  If MOT decides to 
consolidate, we are looking for it to dip back to $96 (its 
previous high in June).  However, it might not slow down that 
much with earnings on Tuesday July 13th.  As we mentioned last 
week there is also a possibility of a split announcement as well, 
as it has more than enough shares available with 1.4 bln 
authorized and only 603 mln issued.  It previously split in April 
of 1994 at the $90.00 level.
 
News: Wednesday and Thursday two analysts from Volpe
Brown Whelan and J.P. Morgan initiated and reiterated
Coverage on MOT, with buy ratings respectively.  Motorola
Announced Wednesday that it is selling its antenna business
to Pinnacle Holdings for $255 million.  MOT is expected
to make a decision later this month on what to do with its 18%
stake in Iridium, a satellite communications company, which
has been "beset by troubles"

**July options expire in 2 weeks**

BUY CALL JUL- 95 MOT-GS OI=4635 at $5.38 SL=$3.50
BUY CALL JUL-100*MOT-GT OI=2564 at $2.50 SL=$1.25
BUY CALL JUL-105 MOT-GA OI= 399 at $1.06 SL=      risky play
BUY CALL AUG- 95 MOT-HS OI= 730 at $8.13 SL=$6.00 
BUY CALL AUG-100 MOT-HT OI= 437 at $5.38 SL=$3.25

Picked on June 20th at $93.13       PE = N/A
Change since picked + $  5.18       52 week high=$99.13
Analysts Ratings  11-13-9-0-0       52 week low =$38.38
Last earnings 04/99 est 0.23  actual 0.28 
Next earnings 07-13 est 0.41  versus 0.01
Average Daily Volume = 3.44 mln 
Chart = http://quote.yahoo.com/q?s=MOT&d=3m

*****

NOK - Nokia Corp $94.56 (+9.31)(-.88)(+4.13)(+3.62)

Nokia is the world's leading mobile phone supplier and a leading 
supplier of mobile and fixed telecom networks including related 
customer services. Nokia also supplies solutions and products 
for fixed and wireless datacom, as well as multimedia terminals 
and computer displays. 

This past week Nokia continued its run, helped by the Fed 
shift to a neutral rate stance. It closed higher every day 
of the week, and saw a nice gain of $9.31. It set a new high 
on Wednesday, Thursday, and Friday. An upgrade on Friday 
helped it close in positive territory on a day when it otherwise 
might have experienced profit taking. Volume was strong, even 
on the day before a long weekend. Nokia's current focus is on 
developing the "Mobile Information Society", as company 
president Ala Pietila put it. Nokia is combining the Internet 
with wireless communication. The company is working hard to 
get its WAP standard accepted for wireless data communication. 
Although Nokia just split on April 12th, 1999, it is now well 
above the level at which it traded just before the split. 
Another split announcement is possible earnings, just a 
few weeks away.

In the news on Friday, Morgan Stanley upgraded Nokia from 
"outperform" to "strong buy", based on a report coming out 
next week on the handset market. This may have kept the stock 
from dropping a bit on profit taking after the big move this 
week. That doesn't mean that profit taking won't happen 
sometime next week. If it does, use it for an option entry 
point.

**July options expire in 2 weeks**

BUY CALL JUL- 90*NAY-GR OI=2164 at $6.25 SL=4.50 ITM
BUY CALL JUL- 95 NAY-GS OI= 302 at $3.38 SL=1.75
BUY CALL AUG- 95 NAY-HS OI= 153 at $6.00 SL=4.25
BUY CALL AUG-100 NAY-HT OI= 238 at $4.13 SL=2.50
BUY CALL OCT-100 NAY-JT OI= 114 at $7.25 SL=5.50

Picked on June 15th at $82.00    PE = 44
Change since picked   +$12.56    52 week low =$29.53 
Analysts Ratings    9-5-0-0-0    52 week high=$92.00
Last earnings 03/99 est  0.39    actual 0.48 surprise=+26%
Next earnings 07-26 est  0.49    versus 0.35
Average daily volume = 2.03 mln.
Chart = http://quote.yahoo.com/q?s=NOK&d=3m

*****

LU - Lucent Technologies, Inc. $70.69 (+7.00)(+3.00)

LU is spun (off) gold.  The company, which was spun off from
telecommunications giant AT&T, is North America's leading maker 
of telecom equipment and software, including business 
communications systems, switching and transmission equipment, 
and wireless networks.  LU also makes integrated circuits and
telecommunications power systems and is a major supplier to the 
personal communications services market.  Technology developed 
by Bell Labs provides the basis for many of LU's products, but 
the company has become a force in the broadband (voice, data, 
and video) networking market through acquisitions.  Most of 
LU's customers are telecom network operators such as AT&T.


LU reached a new 52 week high this week and has risen for five
straight days.  LU has earnings coming up in two weeks and 
tends to have nice earnings runs.  Another big winner with
the FOMC meeting, investors feel safer now to go ahead 
and pay big bucks (P/Es) for technology stocks again.  LU
has been a darling of Wallstreet and it looks like traders
are courting it again.  While it looks like we are in 
breakout mode, LU really needs to pull back for a day or
two.  Yet if we look at Friday (closing at the high for
the day) we may not get such a pullback.  As we all know,
nothing goes up in a straight line.  Look for a dip with 
a solid bottom and then try to ride it into earnings.

With LU's announcement that they will buy Nexabit, LU filled 
a gap in core Internet protocol routers.  LU was really lacking
a solid product in this arena and this purchase of Nexabit
really turns up the heat on rival Cisco Systems.  

**July options expire in 2 weeks**

BUY CALL JUL-65*LU-GM OI=28891 at $6.25 SL=4.25 ITM 5.69
BUY CALL JUL-70 LU-GN OI=13893 at $2.50 SL=1.25
BUY CALL JUL-75 LU-GO OI= 9655 at $0.63 SL=0.00
BUY CALL AUG-70 LU-HN OI= 4757 at $4.88 SL=3.50
BUY CALL AUG-75 LU-HO OI= 4380 at $2.81 SL=1.50

Picked on June 29th at $66.69    PE = 56
Change since picked     +4.00    52 week low =$26.72
Analysts Ratings 10-12-10-0-0    52 week high=$70.75
Last earnings  04/99 est 0.15    actual 0.17 
Next earnings  07-22 est 0.23    versus 0.16
Average daily volume = 10.20 mln
Chart = http://quote.yahoo.com/q?s=LU&d=3m

*****

VOD - Vodaphone Group $205.50 (+.75)(-8.06) 

The vote is in, and Vodafone Group is the UK's #1 mobile 
telecommunications company, serving about four million customers. 
It operates analog and digital cellular networks offering voice 
communications, messaging, paging, and mobile data services. 
Vodafone sells its cellular phone services through three 
distribution businesses: Vodafone Retail, Vodafone Connect, and 
vodafone Corporate.  The company provides cellular services in 
12 countries outside the UK; international operations account 
for 28% of total revenues.  Vodafone will nearly double its 
size with the purchase of US-based AirTouch Communications. 

What a beautiful entry point.  VOD came write down to its
50 dma ($195) and bounced off under selling pressures from
funds getting out of ATI before the merger completed this 
week.  Volume was huge for ATI and VOD was caught in the 
undertow.  Fortunately the merger is complete and its full
steam ahead for this powerhouse in the wireless world.
Even though VOD has already gained $8.50 from its bottom 
this week, we still expect it to climb to $215 before hitting
any major resistance.  Now that the merger is complete 
VOD is free to announce that split we've all been hearing about.
Previously the rumor was that VOD was considering a 4:1 split.
We have found the basis for that rumor.  In a report VOD 
released back on June 8th 1999 when they announced their
yearly earnings, VOD mentioned this below:

"- 4 for 1 capitalisation (bonus) issue to be proposed at AGM,
subject to completion of AirTouch merger."

Looks like a viable basis for such a rumor.  We'll see what
happens now that the merger is complete.  FYI: Vodaphone
is now Vodaphone Airtouch.

NEW: VOD had several analysts initiate coverage on Friday.  
One a "buy" at UST Securities and another a "strong buy" at 
Warburg Dillon.  

**July options expire in 2 weeks**

BUY CALL JUL-200 VOD-GT OI=3446 at $ 9.25 SL=7.50 ITM $5.50 
BUY CALL JUL-210*VOD-GB OI=1257 at $ 4.00 SL=3.00 
BUY CALL JUL-220 VOD-GD OI= 876 at $ 1.56 SL=0.75 
BUY CALL AUG-210 VOD-HB OI= 154 at $11.00 SL=8.50 
BUY CALL AUG-220 VOD-HD OI=  44 at $ 7.25 SL=5.50

Picked on June 26th at $204.75    PE = 73 
Change since picked      +0.75    52 week low =$ 94.00 
Analysts Ratings     4-2-1-0-0    52 week high=$216.44 
Last earnings   04/99 est ?       actual ? 
Next earnings   ?     est 1.56    versus ? 
Average daily volume = 930 K 
Chart = http://quote.yahoo.com/q?s=VOD&d=3m

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








The Option Investor Newsletter             7-4-99
Sunday                5  of  7

*********************************
Telecom/Communications/Networking
(continued)
*********************************

UNPH - Uniphase $167.88 (+16.50)(+5.00)

Uniphase is most widely known for their fiber-optic 
telecommunications equipment which accounts for about 60% of 
their sales. They also make laser subsystems, and laser-based 
semiconductor wafer inspection and analysis equipment. I guess 
UNPH is just your basic optoelectronics company. Just kidding, 
but you will find their products in a number of different fields 
from bar code scanning to biotech to the printing industry.  
UNPH has just merged with Canadian rival JDS Fitel and will 
become JDS Uniphase Corp.

We are still amazed with the strength that UNPH has shown 
this past week.  Earlier, UNPH reached what appeared to be the 
top of its channel at the $164 area.  So what happened?  It blew 
through those levels and never looked back.  Talk about momentum.  
UNPH made a new intraday 52 week high at $174.00 on Thursday.  
UNPH was off $0.13 Friday on one-third of its average volume of 
331K.  Again, we are surprised at UNPH's recent strength.  If 
the market decides to consolidate after its big run last week, 
UNPH could drop several points in a hurry.  If you are not in 
UNPH at the moment, look for a dip with a good intraday bottom
before jumping in.  Traders already in the play should re-examine
their stop losses and move them accordingly with their own level
of risk tolerance.  In the mean time, UNPH is going to enjoy 
the renewed love of tech stocks while the market aims for 
new highs.  Remember, timing is everything when it comes
to options.

NEWS: Other than the recent merger with JDS Fitel, there isn't 
much new to report.  Earnings are not scheduled until early 
August and there remains a strong probability of a split 
announcement.  Earnings are projected to be solidly ahead of last 
year, and 15 analysts seem to like UNPH as well, having awarded
buy or strong buy ratings.

**July options expire in 2 weeks**
(Due to recent Volatility the options are expensive)

BUY CALL JUL-160*UNQ-GL OI=198 at $12.38 SL=$ 9.50 wait for dip
BUY CALL JUL-165 UNQ-GM OI=223 at $ 9.13 SL=$ 6.75
BUY CALL JUL-170 UNQ-GN OI=119 at $ 6.63 SL=$ 4.75
BUY CALL JUL-175 UNQ-GO OI=124 at $ 4.75 SL=$ 3.00 riskier
BUY CALL AUG-170 UNQ-HN OI= 31 at $14.25 SL=$11.25
BUY CALL AUG-175 UNQ-HO OI= 33 at $12.13 SL=$ 9.50

Picked on June 20th at $151.38     PE = N/A
Change since picked    $ 16.50     52-week high=$174.00
Analysts  Ratings    6-9-0-0-0     52 week low  =$  31.25
Last earnings 03/99   est= .32     actual = .36  surprise+12.5%
Next earnings 08/05    est=.41     versus= .26
Average Daily Volume = 926.3 K
Chart = http://quote.yahoo.com/q?s=UNPH&d=3m

*****

QCOM - Qualcomm $144.25 (+17.50)(-3.00)(+21.00)

Qualcomm is the inventor of CDMA technology, the new industry 
standard for mobile communications used in cellular phones, 
wireless telephone system equipment, and satellite ground 
stations.  Its OmniTRACS global positioning system is used by the 
trucking industry to monitor traveling truckers.  In a joint 
venture with several companies, including Loral, QUALCOMM is 
developing the Globalstar system of low-orbiting satellites, 
which will offer telecommunications services around the world 
(and should smoke Iridium like a pork chop, we might add). 
QUALCOMM also publishes the popular Eudora e-mail software.

Fortunately, profit taking last week turned out to be pretty 
mild.  The price just keeps marching, with all technical 
indicators in positive territory.  QCOM had only 1 down day last 
week (Thursday) and sprang back on Friday to close at yet another 
new high of $144.25.  Near-term support is at $141, where it 
bounced Thursday and again Friday morning.  If volume can stay 
up, so can the price.  Resistance is at $147, its highest intra-
day high.  Earnings are tentatively scheduled for July 21.  How 
about the possibility of another split then too?  Perhaps, but no 
guarantee.  QCOM last announced a 2:1 split on April 14, when it 
traded at $157.  Trading gods willing, QCOM could be there again 
by earnings and announce another 2:1 split.  There are 300 mln. 
shares authorized.  There are 150.646 mln. shares issued - 
slightly too many to pull off a split without a shareholder vote.  
No special proxy has been issued yet.  We'll keep an eye out.  
QCOM may exhibit a bit of weakness in conjunction with any market 
weakness.  Let this be a buying opportunity, but exercise caution 
since QCOM's volatility makes it a bit riskier play.  Confirm 
market direction before jumping in.

No news since last Thursday.  Just a reminder from the previous 
week, Deutsche Banc Alex Brown analyst Brian Modoff anticipates 
QCOM's CDMA royalties alone will garner about $1.50 a share in 
1999. That works out to roughly $112.50 per share at a multiple 
of 75 time earnings.  This looks good to analysts.

**July options expire in 2 weeks**

BUY CALL JUL-140*AAW-GH OI=1331 at $ 9.50 SL= 7.00 ITM
BUY CALL JUL-145 AAW-GI OI= 973 at $ 7.00 SL= 5.25
BUY CALL JUL-150 AAW-GJ OI=2752 at $ 5.38 SL= 3.75
BUY CALL AUG-145 AAW-HI OI= 278 at $15.00 SL=11.75
BUY CALL AUG-150 AAW-HJ OI= 483 at $13.00 SL=10.50

Picked on June 22 at $130.63    PE = 399
Change since picked   +13.62    52 week low =$ 18.88
Analysts Ratings   7-7-3-0-0    52 week high=$147.00
Last earnings 04/99 est 0.49    actual 0.21 surprise = 41.38%
Next earnings 07-21 est 0.55    versus 0.17
Average daily volume = 3.58 mln. 
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m

*****

ICIX - Intermedia Communications $31.63 (+4.31)

Intermedia Communications provides local and long-distance 
telephone and data communications services over its own fiber-
optic networks and leased facilities.  Intermedia is the nation's 
largest independent competitive local-exchange carrier (CLEC), 
taking on the Baby Bells in their own territory, and a top 
provider of shared-tenant telecom and Internet services and 
frame-relay-based networking.  Its Digex subsidiary, which is to 
be spun off, provides business Internet connectivity and Web site 
management.  Intermedia has grown rapidly through acquisitions, 
buildup of its own network, and deals with top telecom providers 
such as U S WEST to provide long-haul data services to Intermedia 
customers.

ICIX had really fallen off a cliff prior to mid-June. . . from 
$39 to $21.  No longer.  ICIX bounced hard and has continued 
almost uninterrupted back up to $31.63 since then.  ICIX has been 
up 3 days in a row following the FOMC meeting.  On that day 
(Wednesday), ICIX jumped convincingly above its 50-DMA.  All 
technical indicators are in strong positive territory.  Support 
during the last week can be found at $30 and $31.25.  Near-term 
overhead resistance is only $32.  This could easily be penetrated 
if volume remains in the stock.  Its all-time high is way up at 
$45 set over 1 year ago.  In April it peaked at $40 before 
falling.  The point is there is room to run if trading volume 
remains.  Part of the story is noted below.  Earnings are 
tentatively scheduled on July 28.  Confirm market direction 
before playing.

As part of the FCC's approval of SBC's acquisition of Ameritech, 
SBC will be required to immediately offer local service to 30 
locations outside its home area.  That means partnering or buying 
out existing companies.  ICIX is one such potential buyout 
candidate according to the Wall Street Journal.  Also, Ladenburg 
Thalmann started coverage with a "buy" rating on Wednesday.

**July options expire in 2 weeks**

BUY CALL JUL-30 QIX-GF OI=634 at $2.56 SL=1.25
BUY CALL AUG-30*QIX-HF OI=378 at $4.25 SL=2.50
BUY CALL AUG-35 QIX-HG OI=205 at $2.00 SL=1.00

Picked on June 29th at  $31.63    PE = N/A
Change since picked      +0.00    52 week low =$12.75
Analysts Ratings     5-8-4-0-0    52 week high=$42.50
Last earnings  05/99 est -2.53    actual -2.73 surprise = -7.91%
Next earnings  07-28 est -2.69    versus -2.31
Average daily volume = 1.22 mln. 
Chart = http://quote.yahoo.com/q?s=ICIX&d=3m

****************
Banking
****************

COF - Capital One Financial   $56.69  (+5.88)

One of the largest credit card companies in the US, is
Capital One. Capital One Financial Corp, is a holding
Company, with subsidiaries that provide a variety of 
consumer products, from credit cards to consumer lending
and deposit products.  Did we mention that they market
wireless phone services too! 

COF is off to the races again! After the June 1st 3:1
split, Capital One has been basically trading in a $5.00 
range for most of the month.  Wednesday's decision by
the FMOC, to raise rates pushed Capital One over the $55.00
area for only the second time in the last four weeks.
Volume on the recent move up was better than twice the
norm. Earnings are due out July 16th, and we believe this 
could be the start of an earnings run. Estimates for the 
quarter is in the area of $0.41 per share, and at this point
there is nothing indicating they won't meet the estimates.
The analysts like COF as well, with 18 brokers rating it at 
a moderate to strong buy.  Technically COF doesn't look to 
shabby either, as MACD just now turning positive.  With the 
strength the industry has shown this past week, as well as 
the strong volume that's been behind COF, it could be ready 
to make a run at the previous 52 week high of $60.25 set on 
May 13th. 

In the News Moody's Investors Service raised the credit rating
of Capital One Finanacial Corporation on its senior debt.
(PRNewswire) This upgrade brings COF's senior debt rating
into investment grade.  Back in early June Capital One and
DoubleClick announced that COF would be the preferred credit
card partner on a newly-created shopping and services program.  

**July options expire in 2 weeks**

BUY CALL JUL-50 COF-GJ OI=727 at $7.13 SL=$5.25
BUY CALL JUL-55*COF-GK OI=837 at $3.00 SL=$1.50
BUY CALL JUL-60 COF-GL OI=116 at $0.88 SL=      riskier play
BUY CALL AUG-55 COF-HK OI=220 at $5.00 SL=$3.75
BUY CALL AUG-60 COF-HL OI=157 at $3.00 SL=$1.75

Picked on July 4th at   $56.69   PE = 38
Change since picked      $0.00   52 week high=$60.25 
Analysts' ratings   14-4-2-1-0   52 week low =$17.25
Last earnings   3/99  est 0.39   actual 0.39 surprise=+0%
Next earnings   6/99  est 0.41   versus 0.32 
Average daily volume  766K 
Chart = http://quote.yahoo.com/q?s=cof&d=3m

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

BBY - Best Buy $73.00 (+9.56)(+3.44)

Best Buy Company sells personal computers and other home office 
products, consumer electronics, entertainment software, major 
appliances and related accessories nationwide through its 
retail stores. It is one of the fastest growing retail specialty 
companies in the country.

Best Buy has been on a tear for some time and has moved up 
fairly steadily  over the last 2 weeks, following a record 
first quarter. Like its competition, Circuit City, BBY has 
managed to thrive in the cut-throat competition in the discount 
electronics business, even as others have fallen by the wayside. 
The company is capitalizing on the digital revolution, as 
consumers spend big bucks on everything digital. It operates 
314 "superstores" in 36 states with plans to open 45 to 50 new 
stores each year. In fact, BBY plans to double its size and 
sales in the next 5 years. (Sales were just over $10 bln. last 
year.) In addition to more stores, the company will add new 
products and services and further develop its Internet strategy, 
where it currently offers music and movies online. BBY beats 
earnings estimates quarter after quarter. It has even surpassed 
its own sales projections for digital products, and while PC 
prices are declining, high volume is making up for lower per 
unit revenue. Technically, the stock looks great as well. Last, 
but by no means least, BBY was added to the S&P 500 on June 
29th, replacing Airtouch, which was bought out by Vodaphone, 
another OI pick. That means that every S&P 500 index fund MUST 
BUY shares of BBY. 

Shares of BBY surged $2.40 on Tuesday last week when it took 
its place in the S&P 500. A whopping 13.97 mln. BBY shares 
traded that day. (Average is only 1.75 mln.) On Wednesday, the 
move toward a neutral stance by the Fed sent the stock up 
another $2.41, with investors relieved that consumers will 
still be able to finance those digital products at a reasonable 
rate. Thursday, the stock gained yet another $1.31 after Susan 
Quilty at Morgan Stanley reiterated her "outperform". On Friday, 
BBY gained $4.19, besting Quilty's $72.00 price target by a 
dollar on somewhat above average volume. (Lower than average 
volume is expected just before a long weekend.) BBY has now 
set a new all-time high for four days in a row, and will likely 
pull back one day next week. Try to buy it on a dip, although 
Index fund buying will tend to support the price of this stock.
Funds saw a large inflow of capital last week and S&P 500 index 
fund managers must buy the stocks in the S&P 500. Note: $70 is 
the highest strike available at the time of this writing.

**July options expire in 2 weeks**

BUY CALL JUL-70*BBY-GN OI=451 at $ 4.75 SL=2.75 wait for dip
BUY CALL AUG-70 BBY-HN OI=303 at $ 8.38 SL=6.50
BUY CALL SEP-70 BBY-IN OI= 45 at $10.25 SL=9.00

Picked on July 1st at  $68.81    PE = 45
Change since picked   +$ 4.19    52 week low =$15.97 
Analysts Ratings    8-5-0-0-0    52 week high=$67.75 
Last earnings 05/99  est  .20    actual  .22 surprise=10%
Next earnings 09-15  est  .24    versus  .21 
Average daily volume = 1.75 mln.
Chart = http://quote.yahoo.com/q?s=BBY&d=3m

*****

SNE - Sony Corp $112.75 (+8.56)

Established in 1946 in Japan, Sony is engaged in the development,
design, manufacture, and sale of various kinds of electronic 
equipment, instruments and devices for the consumer and 
professional markets. Sony's principal manufacturing facilities
are located in Japan, North America, Europe and Asia. In addition 
Sony is engaged in leasing, credit card business, satellite 
distribution services. The company is also actively engaged in
the worldwide music and image-based software markets.

On the two-year anniversary of the financial crisis in Asia, 
stock markets were on fire.  The rally in Tokyo stocks pushed 
the Nikkei Average above the 18,000 for the first time in 21 
months.  The Nikkei fell back and closed at 17,932.47, up 71.72 
for the day.  Confidence of an economic recovery in Japan seemed 
to fuel the fire for the bull market.  SNE made a new 52 week high 
on Friday at $113.62, closing at $112.75 up $8.56 for the week.  
If you look at the chart for Sony, you'll see that not only did 
it have a good week, its had a great month, advancing from 
$89.50 on June 4th to its new high on Friday.  That's just over 
25% in one month.  We still believe there is more room to the 
upside, however you may see a pullback and consolidation at 
any time now that we are at new highs.  Fortunately, SNE's 10 
dma has proven to be support so far.  We would view a pullback 
as a potential buying opportunity, but as always, confirm market 
direction with solid volume before initiating a new trade.

There's not much in the way of news concerning SNE, however as 
we stated earlier, Sony seems to be benefiting  from the recent 
forecasts from Goldman Sachs Japan Ltd. raising the six-month 
estimates for the Nikkei to 19,0000, and the fact they recently 
announced plans to cut expenses and capital expenditures to make 
the company more competitive in the world markets.
  
**Be careful, option volume can be low!
**July options expire in 2 weeks**

BUY CALL JUL-110*SNE-GB OI=763 at $4.38 SL=$2.50
BUY CALL JUL-115 SNE-GC OI=380 at $1.63 SL=$0.75
BUY CALL AUG-110 SNE-HB OI= 81 at $7.50 SL=$5.75
BUY CALL AUG-115 SNE-HC OI= 11 at $4.63 SL=$2.50

Picked on June 29 at $108.19     PE = 26
Change since picked  + $4.56     52 week high=$113.62 
Analysts' ratings  1-0-0-0-0     52 week low =$  60.25
Last earnings 3/99  est  n/a     actual n/a
Next earnings 3/00  est  n/a     versus n/a 
Average daily volume 196K 
Chart = http://quote.yahoo.com/q?s=SNE&d=3m

*****

TOM - Tommy Hilfiger Corp $76.38 (+4.75)
 
Tommy Hilfiger Corp. is a manufacturer of casual clothing
and accessories.  They specialize in sportswear, jeanswear,
and childrenswear. Tommy Hilfiger also offers such products
as fragrances and is expanding to offer home furnishings and 
cosmetics.  Hilfiger is located in more than 2,000 department 
and specialty stores and about 55 retail outlets.

Tommy Hilfiger splits 2:1 on July 12th.  Those split runs, 
you've got to love em! TOM announced earnings early last month
of $0.97 per share beating the estimates by almost 10%,
with a 31% increase in revenues.  So what happened then?
TOM fell about $8.00 from the $74.00 area to $66.56 over the 
next nine sessions.  This is the reason we say time and again,
do not hold over earnings.  At the same time they announced 
a 2:1 Split for July 12th. Since that bottom Hilfiger has been 
working its way back to where it originally began.  This is
strictly a split play, however the Retail Industry has shown
strength lately and appears as though it will stay strong well
into the earnings season, as many of the big retailers do not
announce again until late July and into August.  Technically,
TOM has spent the last three days over its 30dma, and MACD is
coming out of the hole as well.  Volume has been a touch light
on the recent advance but then again it everyone was leaving
for the holiday.  Remember, don't hold over a split.
 
News: Not much news at this time on TOM. Last week CS First 
Boston initiated coverage of the apparel maker, with a Strong Buy 
rating.  Several of the brokers have set a 6-12 month price 
target for TOM at $65 - $85.  Earlier last month Hilfiger 
announced a licensing agreement Movado (MOVA) to manufacture 
watches.  

**July options expire in 2 weeks**

BUY CALL JUL-70 TOM-GN OI=450 at $7.50 SL=5.75
BUY CALL JUL-75*TOM-GO OI=574 at $3.88 SL=3.00
BUY CALL JUL-80 TOM-GP OI=207 at $1.50 SL= .75
BUY CALL AUG-75 TOM-HO OI=488 at $6.75 SL=5.00
BUY CALL AUG-80 TOM-HP OI=163 at $4.38 SL=2.75

Picked on July 4th  at  $76.38   PE = 20
Change since picked      $0.00   52 week high=$82.13 
Analysts' ratings   10-3-0-0-0   52 week low =$34.25
Last earnings   6/99  est 0.74   actual 0.97 surprise=+9%
Next earnings   9/99  est 1.44   versus 1.10 
Average daily volume  359K 
Chart = http://quote.yahoo.com/q?s=tom&d=3m

********************
Drugs/Biotech
********************

VISX - Visx, Inc $85.13 (+4.38)(+8.69)

Visx is a leader in the development of refractive laser 
technology, with a $5 billion market cap. It designs and makes 
surgical systems that re-contour the front surface of the 
cornea of the human eye in order to correct vision problems. 
It claims about 75% of the laser vision correction market, its 
only business. VISX systems are available worldwide.

We covered VISX during its last earnings run and also prior 
to its recent split on May 13th. VISX earnings for the current 
quarter are due out in less than 2 weeks, and the interest 
rate environment is once again friendly to high growth stocks. 
We are adding VISX in expectation of another good earnings run. 
The laser vision correction market is expected to more than 
triple from 425,000 procedures done in 1998 to 1.3 mln in 2000 
and the company sees earnings growth of between 25 and 35% 
annually. The soaring price of this stock is a result of that 
incredible growth. A correction in second half of May was 
caused by investor's fears of a negative outcome in an FTC case 
against the company. (The outcome would have been appealed 
anyway, and it would have had no effect on the company for 1 
to 1 1/2 years during the appeal.) As it turns out, the ruling 
went in favor of the company, and the FTC is appealing. Again, 
no effect on the company during the lengthy appeal process. 
The stock has fully recovered, resumed its climb, and the 
earnings run is just beginning! Be forewarned, this is a very 
volatile stock. It can rise AND fall a great deal within a 
trading day.
  
Back on June 22, Wade H. King, MD of BancBoston Robertson 
Stephens reiterated his buy rating on the company. Otherwise, 
no current news. This stock is not for everyone due to its 
high volatility. Be sure to choose your entry carefully. 

**July options expire in 2 weeks**

BUY CALL JUL-80*VFS-GP OI=1139 at $7.25 SL=5.25 ITM $5.13
BUY CALL JUL-85 VFS-GQ OI= 791 at $4.50 SL=2.75
BUY CALL JUL-90 VFS-GR OI= 729 at $2.44 SL=1.25
BUY CALL AUG-90 VFS-HR OI= 744 at $5.88 SL=4.25

Picked on JUL 4TH at $85.13     PE = n/a
Change since picked  $ 0.00     52 week low =$10.50 
Analysts Ratings  5-3-2-0-0     52 week high=$85.00
Last earnings 3/99 est 0.27     actual 0.29 surprise=+7%
Next earnings 07-14  est 0.29   versus 0.14
Average daily volume = 1.62 mln.
Chart = http://quote.yahoo.com/q?s=VISX&d=3m

*****

PFE - Pfizer $38.63 (+4.81 sa)(+.40)

Pfizer Inc is a research-based global pharmaceutical company 
that discovers, develops, manufactures and markets innovative 
medicines for humans and animals. Its three $1 billion plus 
drugs include Norvasc for hypertension and angina; Zoloft, a 
leading anti-depressant; and Zithromax, a highly prescribed 
anti-biotic. Other successful Pfizer drugs that we all know 
include: Viagra, Lipitor, and Celebrex. Pfizer employs nearly 
50,000 people on 6 continents.

Yes, you have heard this before: it looks like the drugs are 
turning around. Pfizer has been on a bit of a run, and we are 
adding it for a quick play before it announces earnings next
Monday. (Note: while First call shows an earnings date of June 
12th, Zacks is still showing June 9th. We will confirm the date 
with the company before our next edition.) PFE split 3:1 
Wednesday after the close, but the economic news this week and 
the approaching earnings date prevented any post-split depression. 
In fact, PFE rose both Thursday and Friday on volume that was 
more than 3 times the average (duh?). Technical indicators are 
very positive. On Friday, PFE eclipsed the $38.67 intermediate 
high it had set on June 4th by a few cents, although it closed 
just a few cents below that level. A strong move above possible 
resistance at $38.67 next week would signal an entry point for 
this short play. Don't jump in until after the first hour of 
trading, when things can look very different than they do at 
the open.

This is not a news-driven play. If it were, we would talk about 
Medicare reform, Merck's cox-2 challenger to Celebrex, and 
Viagra's unpredictable sales (a new impotence drug is on the 
horizon.) We just want to pick up a quick gain on a short 
earnings run on a stock that is, at least temporarily, back 
in favor.

**July options expire in 2 weeks**

BUY CALL JUL-35*PFE-GG OI=20480 at $3.75 SL=1.75
BUY CALL JUL-40 PFE-GH OI=16676 at $0.69 SL=
BUY CALL AUG-35 PFE-HG OI= 4209 at $4.50 SL=2.75
BUY CALL AUG-40 PFE-HH OI= 5418 at $1.69 SL=0.75

Picked on July 4th at  $38.63       PE = 46
Change since picked  +$  0.00       52 week low =$28.63
Analysts Ratings  10-5-13-0-0       52 week high=$50.00
Last earnings 03/99 est 0.62   actual 0.62 surprise=+0%
Next earnings 07-12 est 0.50   versus 0.47
Average daily volume = 5.02 mln
Chart = http://quote.yahoo.com/q?s=PFE&d=3m

****

CAH - Cardinal Health $69.69 (+10.88)

Cardinal is a health care product and pharmaceutical company.  
They distribute cost-effective supplies and services to drug 
stores, hospitals, care centers and supermarkets throughout 
the U.S.  This includes their own subsidiaries such as Medicine 
Shoppe International, Owen Healthcare, and R P Scherer.  In 
February, they completed a merger with Allegiance Corp that 
brought the combined entity to a market value of $21 billion.

CAH has been riding high on the phenomenal reception for its 
new Cardinal One Source marketing launch.  This program will 
involve helping pharmaceutical manufacturers develop, market, 
package, launch and distribute products.  This plus the 
resurgence of the drug sector has pushed CAH above resistance 
at $60.  The stock quickly climbed to $70, which it hit on 
Friday before closing just under that mark.  They have also 
announced some other positive alliances which have added to 
the momentum.  We expect CAH to continue back to the old highs 
set in early 1999 at $83.  But we are also adding a word of 
caution from running out to by the stock.  The sector has had 
a great push the past two weeks and you may want to wait for 
a pullback before jumping in.  Look for an entry point and 
set your stops in case a correction takes hold.  But any down 
turn should be short-term as all signals are currently set to 
go for the drug group.  

One of the alliances mentioned above was with IMS Health.  
They signed a 5-year agreement to provide healthcare companies 
with drug sales and distribution patterns.  This represents 
another step in fulfilling a goal to be the leading provider 
of services supporting healthcare.     

**July options expire in 2 weeks**

BUY CALL JUL-65 CAH-GM OI=455 at $5.25 SL=3.50
BUY CALL AUG-65 CAH-HM OI=376 at $7.00 SL=5.25
BUY CALL AUG-70*CAH-HN OI= 71 at $4.00 SL=2.50 vol=80 on Fri.
BUY CALL SEP-70 CAH-IN OI=191 at $5.00 SL=3.25

Picked on July 2nd at    $69.69    P/E = 48
Change since picked       +0.00    52-week high=$83.25
Analysts Ratings      9-6-0-0-0    52-week low =$53.71
Last earnings 04/99 est=    .55    actual= .56
Next earnings 07/27 est=    .57    versus= .46
Average Daily Volume = 866 K
Chart = http://quote.yahoo.com/q?s=CAH&d=3m

****

SGP - Schering-Plough $54.50 (+5.69)

Schering-Plough Corporation discovers, develops, manufactures, 
and markets pharmaceutical and health care products worldwide. 
The company's pharmaceutical segment makes prescription drugs 
(including allergy and respiratory drugs, anti-infective and 
anticancer drugs, and cardiovascular drugs) and animal health 
products (anthelmintics, antibiotics, antimicrobials, anti-
inflammatory drugs, growth hormones, nutritionals, steroid 
ointments, ophthalmic ointments, and vaccines). The company's 
health care segment makes Clear Away wart remover; Dr. Scholl's 
foot care products; Tinactin antifungals; Coppertone sun care 
products; Afrin nasal decongestant; Chlor-Trimeton antihistamine;
Correctol laxative; and Gyne-Lotrimin for vaginal yeast 
infections. 

It looks like the correction is ending in the drug sector and 
SGP had a big part in the turn around.  It was on June 24 that 
Schering-Plough CEO Richard Kogan met with 250 analysts to 
give the thumbs up on the outlook for 1999 and beyond.  This 
coincides with the recovery in the sector.  Kogan said that 
2Q earnings will be at least .36 cents a share, which is the 
estimate.  And that earnings for the fiscal year 1999 are on 
target for 20% growth.  In fact, all the good news was more 
than anticipated and just what the analysts were waiting to 
hear.  This relieved a lot of concerns of over-valuation in 
the sector.  Now we've seen SGP move back above all major 
moving averages and it has lots of room left to climb.  We 
do want to caution against running out at the open to buy 
calls.  The stock and sector have been on a fabulous run 
that should prompt a bit of profit-taking.  But use this as 
a potential entry point.  Earnings are 3 weeks out so, market 
willing, we will have more upside to go.  

On Thursday there was an article about the fight against a 
fairly new virus that causes hepatitis C.  Two new steps have 
had promising results in treating the virus.  Currently SGP 
makes the only drugs that treat the disease.  Further steps 
in identify and curing the virus may mean new drugs from SGP 
to aid in treatment.

**July options expire in 2 weeks**

BUY CALL JUL-50 SGP-GJ OI=3978 at $4.88 SL=3.25
BUY CALL JUL-55 SGP-GK OI= 736 at $1.25 SL=0.50
BUY CALL AUG-50 SGP-HJ OI=   0 at $5.75 SL=4.25 fri vol=129
BUY CALL AUG-55*SGP-HK OI=   0 at $2.56 SL=1.25 fri vol=468

Picked on July 2nd at    $54.50    P/E = 43
Change since picked       +0.00    52-week high=$60.81
Analysts Ratings     9-11-9-0-0    52-week low =$42.38
Last earnings 04/99 est=    .36    actual= .36
Next earnings 07/21 est=    .36    versus= .31
Average Daily Volume = 3.25 mln  
Chart = http://quote.yahoo.com/q?s=SGP&d=3m


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







The Option Investor Newsletter            7-4-99
Sunday                6  of  7

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

GBLX - Global Crossing Ltd $40.00 (-5.81)

Global Crossing is a global Internet and long distance 
telecommunications company.  They are building a network of 
fiber-optic cable systems under the oceans connecting the 
globe.  Presently their Atlantic Crossing (AC-1) connects 
the US and the UK, Netherlands, and Germany.  GBLX future 
plans include a Pacific, Mid-Atlantic and Pan American 
crossings.  Co-chairman and founder Gary Winnick owns 25% 
of the company, which has recently negotiated to buy the 
telecommunications company, Frontier, and then merge with 
US West.

Upstart telecommunications company, Qwest (QWST), is 
rivaling GBLX in their "quest" to build a high-speed 
Internet network across the globe.  And right now, each 
company's prime objective is to acquire Frontier's and US 
West's 27 mln. customers and phone networks.  The battle 
heated up this week as Frontier and US West agreed to talks 
with Qwest regarding the recently sweetened-up deal. 
Global Crossing does have a standing agreement with US 
West, but approved the talks and plans to take no legal 
action.  Many believe the numbers say it all, yet GBLX 
contends their offer is superior "based on strategic, 
financial, regulatory, and timing considerations".  Qwest 
has offered 11.4 bln. in cash and stock to Frontier 
and 34.7 bln. in stock to US West.  While Global Crossing's 
bid was 10.9 bln. cash and stock to Frontier and 31 bln. in 
stock to US West.  Also, Qwest's offer is based on a fixed-
offer price of $69 p/s for US West and $48 p/s plus $20 
cash p/s for Frontier contingent upon Qwest's stock price 
staying in the range of $30.50 and $43.50.  This is an 
important aspect.  Since the battle has ensued GBLX has 
dropped significantly and at present, the company would 
have to authorize the issuance of more shares if they want 
to up their offer - something it may very well have to do 
if they want to stay in the running!  Of course current
shareholders are never excited when the company dilutes
their shares by just issuing new ones.  The acquisitions 
are momentous to the future prosperity of these global 
entrepreneurs.

Qwest is by no means playing footsie and is prepared to 
initiate a hostile takeover by taking their offer directly 
to the shareholders and requesting a tendering (selling) of 
shares if they don't receive the positive response they 
expect.  Talks that are to begin this week-end are the 
first step and if all goes well a confidentiality pact 
could be reached.  This type of agreement would give 
protection features to Frontier and US West.  Importantly, 
it would forbid Qwest from proceeding with a hostile 
takeover and also block them from lowering their bid after 
reviewing the company's financial information. 

This is the play.  It's almost a win/win situation, but 
let's remember nothing is guaranteed and reality is what 
matters.  So let's take it from a couple different angles.  
If GBLX loses the bid (and some analysts believe this is 
the inevitable outcome), then of course the stock will 
suffer as it's doing now.  But (and this is a big but) when 
the fat lady does sing at the finale, GBLX may then rally 
short-term as a result of not having to swallow such large 
fish in US West and Frontier - you need to play with stops
to protect yourself from this.  It's not worth the risk!  
On the other side of the coin, GBLX sweetens up their own 
deal and continues to do battle.  This may very well make 
investors even more skittish and the additional cost of the 
bid will put quite a drain on the stock's price (remember 
GBLX would most likely have to authorize more shares to 
pull this off).  

Since Qwest stepped onto the scene Mid-June, GBLX was at 
relative support of $48 and $50 just below its 50 dma. 
Then it slunk down to a level of $45-46 soon after.  Since 
the gravity of this situation and its long-term effects 
have really started to sink in among the investors, GBLX is 
once again declining.   The stock is moving rapidly towards 
200 dma at $32.  The only saving grace is the volume 
has been very light for the most part at less than half the 
normal levels.  However, there's no denying the stock's 
downward spiral.  There isn't any bottom resistance to 
speak of since GBLX hasn't been below $45 since last April.  
Even though this play appears to be quite solid, please 
consider using stops for protection.  In this market, you 
never know what's lurking around the corner.

**July options expire in 2 weeks**

BUY PUT JUL-40*QGV-SH OI=4126 at $2.50 SL=1.25
BUY PUT JUL-45 QGV-SI OI=3442 at $6.00 SL=4.25

Average daily volume = 1.89 mln.
Chart = http://quote.yahoo.com/q?s=GBLX&D=3m

****

MCK - McKesson Corp. $32.25 (+1.25)(-5.06) 

First, you get your pills.  Next, you need some water.  MCK 
delivers both, along with the technology to help your doctor 
track your medication.  McKesson HBOC was formed when McKesson, 
North America's top distributor of pharmaceuticals and health 
care products, bought HBO & Company (HBOC), the world leader in 
health care information systems and technology.  Other 
subsidiaries distribute medical and surgical products to the 
health care industry and distribute bottled water (Sparkletts,
Alhambra, Crystal).  MCK is the US's #3 bottled-water supplier, 
behind Nestle and Suntory.  Prior to the HBOC purchase employees 
owned about 21% of McKesson through profit-sharing.

After rising for three straight days last week, MCK again 
traded lower on Friday.  As we mentioned on Thursday, MCK
seemed to be rallying with the overall market.  However,
it couldn't last for long and traders used any strength to 
start selling again on Friday.  Look at the intraday chart to 
see the tops. The company has bad news coming out constantly 
as a result of accounting discrepancies.  The stock is trading 
near 52 week lows, but still looks like we could slip further
if it violates $30.  

Several class action suits have been filed lately and though
these suits rarely reach fruition, the negatives they portray
will be a weight on MCK's stock.  We like the fact that on 
another very positive market day on Friday, MCK lost 2.7%. 

**July options expire in 2 weeks**

BUY PUT JUL-35*MCK-SG OI= 821 at $3.25 SL=1.75 ITM $2.75 
BUY PUT JUL-30 MCK-SF OI=1346 at $0.38 SL= .00 

Average daily volume = 3.62 mln. 
Chart = http://quote.yahoo.com/q?s=MCK&d=3m
 
*****

FON - Sprint Corporation $50.13 (-4.13)

Sprint is the nation's third largest provider of long-distance 
behind AT&T and Worldcom.  It is also the second non-baby 
bell local phone service company behind GTE with more than 
7.6 million phone lines.  Besides that, Sprint is involved 
with telecom equipment distribution, directory publishing 
and the Internet. They also offer the ION project (Integrated 
On-Demand Network) which is a broad-band service to meet 
future demands.  So it is a formidable foe in the telecom 
market.

The Dow Jones Industrials was up almost 600 points this week 
so everything must be going up right?  Well, FON shareholders 
probably wish that were the case but it's not.  We mentioned 
on Thursday when we added FON about some of the recent trials 
that are not only affecting them but others within the sector 
as well.  Both Paine Webber and Morgan Stanley kicked the 
selling party off on Wednesday as they shared their feelings 
about the potential of a price war among long distance firms.  
This is when FON began a decline that lasted for the rest of 
the week despite the FOMC's interest rate surprise.  In fact, 
that may have hurt FON somewhat as investors want to free up 
as much cash as possible to purchase some of the high flying 
growth stocks.  No one wants a stock that is stuck in the mud 
when the market is off to new highs.  FON dropped below the 
support of the 100-dma on Friday at $50 but was able to finish 
just above it at $50.12.  With all the volume that continues 
to pour in, we see the potential for even more downside.  But 
wait for an entry point.  The stock has been down 4 days in a 
row and could be ready for a day or two of relief.  There was 
no news on Friday but you can expect other analysts to comment 
on long distance prices and the outlook for the sector.  These 
comments will impact our play so stay tuned to the news. 

**July options expire in 2 weeks**

BUY PUT JUL-55 FON-SK OI=854 at $5.12 SL=3.25
BUY PUT JUL-50*FON-SJ OI=985 at $1.50 SL=0.75
BUY PUT AUG-50 FON-TJ OI=179 at $2.50 SL=1.25

Average Daily Volume = 1.83 mln
Chart = http://quote.yahoo.com/q?s=FON&d=3m
 
*****

WLP - Wellpoint Health $82.56 (-2.81)(-10.69)(+8.25)

Wellpoint Health Networks serves about 32 million individuals 
in the U.S. through HMOs, PPOs, and special networks such as 
dental, vision and mental health plans.  The company operates 
as Blue Cross in California and UNICARE through the rest of 
the nation.  Wellpoint also sells life insurance and third 
party administration to self-employed businesses.  In 1997, 
they acquired the group health and related life business of
John Hancock Mutual. 

Despite an upgrade from JP Morgan on Thursday, WLP still 
ended lower on the week.  That was also including a more than 
6% gain in the Dow Jones and 7.4% gain in the NASDAQ on the 
week.  On Thursday, JP Morgan reiterated their buy rating on 
the stock with a $97 price target.  This helped WLP rally for 
a few hours but it lacked the substance needed to end the 
recent downtrend.  WLP finished the week poorly by trading 
down both Thursday and Friday.  We are now approaching the 
$80 level where the stock bounced on Monday.  There is support 
at that price from the 50-dma.  It will be interesting to 
see if the stock is strong enough to hold that level.  It 
definitely hasn't had the appearance of a strong stock lately.  
But use caution opening new plays until we get a break below 
$80.  We are entering earnings season and news from all stocks 
in the sector will impact our play.  Investors will be looking 
to see how much earnings will be affected by the new government 
payment system.  Trail your stops to lock in profits.  If we 
can get any pullback in the broad markets, it could trigger 
a new sell off in WLP.           

**July options expire in 2 weeks**

BUY PUT JUL-85*WLP-SQ OI=293 at $4.00 SL=2.50
BUY PUT JUL-80 WLP-SP OI= 47 at $1.44 SL=0.75

Average Daily Volume = 331 K
Chart = http://quote.yahoo.com/q?s=WLP&d=3m 

****
 
AET - Aetna $89.25 (+0.31)(-4.62)

Aetna is traditionally known as one of the leading providers 
of insurance in the U.S.  It has also diversified to become 
one of the largest financial services, health insurance, and 
managed-care providers.  Aetna's products include retirement 
services, variable life annuities, long-term care insurance, 
and pension administration just to name a few.  These products 
and services are offered in countries all over the world.

AET proved to be immune to any rally this week.  Instead it 
spent most of the week range bound with sub-par volume.  This 
is a fairly common pattern after a stock falls through major 
support as AET the week before.  But we are watching it closely
to see if support will emerge at the bottom of the range which 
is $88.  It has bounced off that price a few times this week.  
Unfortunately for AET, it hasn't been able to bounce above 
$90 either.  We would recommend waiting until AET broke below 
$88 before opening new plays.  But we are encouraged by the 
lack of participation in an enormous rally this past week.  
The news this week revolved around a July 1st deadline in which 
insurers had to inform the government about cancellations in 
their HMO plans.  Aetna, like many others, did discontinue 
some service but it was limited to only five counties and 
they did make a point to blame the government's new payment 
structure for the closures.  One other note this week came 
from J.P.Morgan who started Aetna at market-perform (or 
essentially the lowest possible rating without alienating 
the company).  That vote of confidence is another plus for 
our play.  Set your stops and confirm direction first. 

**July options expire in 2 weeks**

BUY PUT JUL-90*AET-SR OI=1064 at $2.88 SL=1.50
BUY PUT JUL-85 AET-SQ OI= 302 at $0.81 SL=0.00

Average Daily Volume = 734 K

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

********
NEW PUTS
********

AT - Alltel Corporation $69.31 (-2.81)

ALLTEL is a customer-focused, information technology company 
that provides wireline and wireless communications and 
information services.  ALLTEL provides wireline and wireless 
communications services to more than 6.5 million customers 
in 23 states and has more than 1,000 information services 
clients in 53 countries and territories.  Its telephone 
services, offered mainly in Sun Belt states, account for 
more than half the company's revenues.  Its telecommunications 
products are warehoused and sold by ALLTEL's distribution 
subsidiary, and another subsidiary publishes telephone 
directories.

Alltel struggled to hang on to support this week despite a 
strong market before eventually giving in to the selling.  
This was even with Stephens Inc. starting Alltel at a buy 
rating.  The $70 level was providing key support from the 
50-dma.  But as you can see from the chart, AT fell through 
that price on Friday and it was accompanied by some heavy 
volume.  There are some concerns out there that investors 
are having to digest.  One of which is a rapidly deteriorating 
sector.  Recent analyst comments have suggested that a price 
war could be starting among major carriers to attract new 
business.  This has investors worried and no one appears 
excited to wait it out.  Plus, no one wants to miss out on 
the rapid rise in the market by holding a stock with a cloudy 
future.  And this is happening at a bad time for Alltel 
as they try to expand at a fast rate by making multiple 
acquisitions,  most of which is in stock.  So we are left with 
a highly leveraged company in a weakening industry who's stock 
has seen a steep rise.  Profit-taking anyone?  We expect to 
see a decline over the short-term while the sector problems 
work themselves out.  We see some support at $66 before 
dropping to major support from the 200-dma at $60.  Expect 
the buy rating on Friday to lend some support as word spread 
late Friday of the initiated coverage but this will help in 
choosing an entry point.  And keep your eyes on other major 
telecom companies for an indication of the industry sentiment.  

**July options expire in 2 weeks**

BUY PUT JUL-70*AT-SN OI=79 at $2.19 SL=1.00

Average Daily Volume = 548 K

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





******
Combos      
******

Markets Celebrate Independence Day At Record Levels...

Friday, July 2

U.S. markets rallied as investors continued to prosper from the
new outlook on inflation and the Fed's decision to raise a key
short term rate just a quarter of a percentage point. The Dow and
two other key indices; the Nasdaq composite index and the S&P 500
index, all finished Friday at record high closes. The blue chip
index ended at 11,139, up 72 points to eclipse the previous mark
of 11,107 set on May 13. The Nasdaq ended at 2,741, up 34 points
while the S&P 500 ended 10 points higher at 1,391.

Thursday's new plays (positions/prices):

SPD  AUG30C/JUL30C $0.75 debit (easy entry at the target price)
SQNT AUG12C/AUG15C $1.50 debit (priced at the open; $1.38 at 9:40)
TIE  OCT12C/JUL12C $1.25 debit (possibly $1.12 before 10:00)

Sequent Computers (SQNT) was our main focus during the morning
session and the window of opportunity to achieve the target
entry price was very small. The stock moved down initially and
was trading about $0.38 lower when the options market opened.
The first new quotes were slightly below the suggested debit of
$1.50 but started moving higher almost immediately as the stock
price firmed. At 9:42, the target was available but just a few
minutes later, the stock price had moved up to $16.68 and the
debit was up to $1.75. The target was unavailable for the rest
of the day. Standard Products (SPD) was the next candidate and
new positions on the bullish speculation play were traded almost
immediately after the options market opened. Although we did not
participate, our outlook also favored the more speculative (and
cheaper) position. There were no contracts opened in the bearish
spread. Titanium Metals (TIE) was the long-term play and it was
available at and below the target price at various times during
the day.

Portfolio plays:

Lots of positive activity in the spreads portfolio this week and
the recent bullish trend has rejuvenated many of our long-term
positions. In the calendar spread portfolio, almost all of the
plays are profitable. The most uncooperative issue in that group
is Apria Healthcare (AHG) and we don't see any indication of
recovery in the near future. As the July expiration approaches,
we will make a decision as to the appropriate adjustment for the
remaining two months of the play. The remaining bullish (debit)
positions are still performing well but there are two negative
plays in the debit straddle group; Robert Half (RHI) and Gaylord
Entertainment (GET). Both of these positions still have plenty
of time to make a move out of their current trading range.

Today's most interesting mover was once again Gemstar (GMST) as
the stock price gapped up after breaking the resistance level at
$65. It was almost exactly as we noted in yesterday's commentary
and in the short consolidation period during morning trading,
there was ample opportunity to exit the short position before the
stock moved in the $70 range.

With many stocks in need of a short consolidation period, we will
focus on disparity plays with well defined support/resistance
areas and neutral positions that can benefit from option pricing
or market volatility.

Questions & comments on spreads/combos to ray@OptionInvestor.com
******************************************************************
				- NEW PLAYS -
******************************************************************
CMVT - Comverse Technology  $74.00     *** Post-Split Options ***

Comverse Technology designs, develops, manufactures, markets and
supports special purpose computer and telecommunications systems
for multimedia communications and other information processing
applications. The Company's systems are used in a broad range of
applications by fixed and wireless telephone network operators,
government agencies, financial institutions and other public and
commercial organizations worldwide.

The Company has developed two main product lines, the Trilogue
and Audiodisk. Their subsidiary, Comverse Network Systems, a
leading supplier of enhanced services platforms to wireless and
wireline network operators, recently debuted its CellCaster(TM)
Cell Broadcast system, which enables operators to differentiate
their service and increase airtime, by providing customized
messages and information to subscribers either across the
network or to specified groups within the network. The system
enables operators to broadcast a variety of information that is
location-specific. Subscribers can receive weather and traffic
reports, public service announcements, or news headlines.

Record quarterly earnings results were posted in early June and
the stock is currently in a slightly bullish trend with solid
support near $66. A small disparity in the post-split (adjusted)
options gives us a favorable short-term position.

PLAY (conservative/credit spread):

BUY  PUT JUL-65.00 CQV-SM OI=12 A=$0.56
SELL PUT JUL-66.62 CZV-SZ OI=40 B=$0.87
INITIAL NET CREDIT TARGET=$0.37 ROI=22% (2 weeks)

Chart = http://quote.yahoo.com/q?s=CMVT&d=3m
******************************************************************
                       - TECHNICALS ONLY -

These plays are based on the current price or trading range of
the underlying issue and the recent technical history or trend.
The probability of profit from these positions is also higher
than other plays in the same strategy. Current news and market
sentiment will have an effect on these positions so review each
play individually and make your own decision about the future
outcome of the stock price.
******************************************************************
BRL - Barr Laboratories  $39.62     *** A Key Moment! ***

Barr Laboratories is an independent developer, manufacturer and
marketer of high quality generic pharmaceuticals. The company
distributes a wide range of prescription drug equivalents to
branded pharmaceuticals. The product line is primarily in
therapeutic categories such as: treatments for cancer, hormone
replacement therapies, pain management products, medicines for
hypertension and heart disease, and antibiotics and medicine to
combat infections.

The generic drug maker currently has 10 proprietary products in
development, three of which are fully patent protected, and it
is an aggressive challenger of the patents held by major drug
companies on their best drugs. The key to Barr's future growth
is Tamoxifen, a top-selling estrogen used to prevent and treat
breast cancer. Its rapidly growing share of this market may boost
the share value in the near future.

BRL also recently announced that it has won marketing approval
for Cefadroxil, for the treatment of urinary tract infections.
Cefadroxil is the generic version of Bristol-Myers Durice drug,
and Barr said it will begin shipping its new product immediately.

The stock has made a significant bullish move in the last month
but is now trading near a recent resistance area. A large move
should occur in one direction (or the other) over the next few
weeks.

PLAY (conservative/debit straddle):

BUY CALL NOV-40 BRL-KH OI=167 A=$4.62
BUY PUT  NOV-40 BRL-WH OI=145 A=$4.25
INITIAL NET DEBIT TARGET=$8.50 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=BRL&d=3m
******************************************************************
ALLC - Allied Capital Corp.  $22.50   *** Cheap Options ***

Allied Capital Corporation is a lender to and investor in private
small and medium-sized businesses. The company is the nation's
largest business development Company, and has been dedicated to
financing growing businesses nationwide. They provide loans and
investments in three areas: mezzanine finance, commercial real
estate finance and small business lending including loans through
the SBA 7(a) guaranteed loan program. 

An upgrade, a downgrade and not much else to move this issue and
yet the stock price has undergone some sharp movements over the
past few days. The options remain fairly priced and the recent
break-out above the trading range near $19 suggests this one has
further room on the upside. The low risk position allows us to
favorably speculate on the long-term volatility of this issue.

PLAY (conservative/debit straddle):

BUY CALL NOV-22.50 CQL-KX OI=72 A=$1.25
BUY PUT  NOV-22.50 CQL-WX OI=0  A=$1.93
INITIAL NET DEBIT TARGET=$3.00 Target ROI=25%

Chart = http://quote.yahoo.com/q?s=ALLC&d=3m
******************************************************************
VMC - Vulcan Materials  $50.43     *** Where To From Here? ***

Vulcan Materials and its subsidiaries are principally engaged in
the production, distribution and sale of construction materials
and industrial and specialty chemicals. They are the nation's
leading producer of construction aggregates. Their products are
marketed under highly competitive conditions, including price,
service and product performance and there are numerous companies
vying for market share in their primary segments.

Vulcan Materials recently warned that its second-quarter profits
would trail last year's results but its recent addition to the
S&P 500 index appears to have offset any selling that occurred on
the negative forecast. In the year-ago quarter, Vulcan earned $70 
million, or $2.05 a share, on net sales totaling $465.8 million
but its chemicals unit is now hurting due to weak prices and the
company expects to report a slight loss in that product category.

The stock split 3-for-1 in March and has been on a roller-coaster
ride ever since. The current perch at a recent failed rally area
should result in either a new high or another ride to the bottom.

PLAY (conservative/debit straddle):

BUY  CALL NOV-50 VMC-KJ OI=232 A=$3.75
SELL CALL NOV-50 VMC-WJ OI=20  B=$3.00
INITIAL NET DEBIT TARGET=$6.50 TARGET ROI=25%

Chart = http://quote.yahoo.com/q?s=VMC&d=3m
******************************************************************
BTY - British Telecom (PLC)  $174.81     *** A Trading Range? ***

British Telecommunications plc is an international provider of
telecommunications services. The company provides local and long
distance telephone call products and services in the U.K., phone
exchange lines to homes and businesses, international telephone
calls to and from the United Kingdom and telecommunications
equipment for customers' premises.

Lots of news and commentary about the growing competition in the
European telecommunications market but we are going to base this
play completely on the unique technical formation and favorable
option prices that currently exist on this high priced ADR. The
calculated probability of a favorable outcome is not accurately
forecast because of the recent change in volatility. I believe
both of these positions offer a reasonable risk/reward. The BTY
options market is thinly traded and these plays must be ordered
as net-debit (or net-credit) positions.

The first play is a standard butterfly (this time the Puts are
slightly more favorable), and the second play is just a pair of
OTM credit spreads (sometimes called a Long Iron Butterfly).

PLAY #1 (conservative/butterfly straddle):

BUY  (5)  PUTS JUL-180 BTY-SP OI=0  A=$8.00
SELL (10) PUTS JUL-175 BTY-SO OI=11 B=$4.62
BUY  (5)  PUTS JUL-170 BTY-SN OI=23 A=$2.75
INITIAL NET DEBIT TARGET=$1.00 ROI(max)=400%
UPSIDE B/E=$179.00 DOWNSIDE B/E=$171.00

The butterfly spread is generally a neutral position that is a
combination of both a BULL spread and a BEAR spread. This spread
is designed primarily for the issue that will not experience much
of a net rise or decline by expiration. It usually requires only
a small investment or collateral requirement and has limited risk
but profits are limited as well. It can also be costly in terms of
commissions so you should consider playing these combinations with
a low cost (discount) broker. There are three strike prices in a
butterfly spread with calls, and it can also be done with puts or
a combination of the two. There are several approaches to trading
butterflys successfully and most have similiar risk/reward numbers.
The best (and simplest) outcome would be for the stock price to
finish the July expiration period at $175, where the maximum
profit of $4.00 is achieved.

PLAY #2 (neutral and opposing/credit spreads):

BUY  PUT JUL-165 BTY-SM OI=44 A=$1.31
SELL PUT JUL-170 BTY-SN OI=23 B=$2.37

BUY  CALL JUL-185 BTY-GQ OI=18 A=$1.37
SELL CALL JUL-180 BTY-GP OI=13 B=$2.43

OVERALL INITIAL NET CREDIT TARGET=$2.25 ROI(max)=81%
UPSIDE B/E=$182.25 DOWNSIDE B/E=$167.75

Obviously, a stock price finish inside the sold strikes on the
expiration date would be the most favorable outcome.

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

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

Please send questions and comments to:

ray@OptionInvestor.com



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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            7-4-99
Sunday                7  of  7

**************
COVERED CALLS
**************
Trading In A Fast Market...

Many of the emails we receive are questions about trading in a
volatile market. There are numerous obstacles that an investor
must overcome when participating in this type of environment and
it is important to understand the limitations of the system that
we use.

Wide price fluctuations and heavy trading characterize volatile
markets.  These conditions generally arise as a result of an
imbalance of trade orders in one direction or another and can
occur at the market opening or at any time during the trading
day in either the over-the-counter exchanges or the NASDAQ. The
markets can be driven by many different factors including news
releases, changes in analyst recommendations, Internet news and
rumors in chat rooms, adjustments to interest rates, interviews
with leading policy-makers or for no reason at all.

Sometimes the sheer volume of trades being processed in a fast
market will lead to delays in trade execution and/or trade
reports.  Prices and trades move so quickly that there can be
significant differences between the quote you receive at one
point in time and the price at which the trade is executed later.
Even real-time quotes will be lagging behind the current market.
The number of shares/contracts available at a certain price and
the size of the position at the current quote by a market maker
can also change rapidly; affecting the likelihood of your order
being filled at that previously quoted price.

Market orders are executed on a first-come first-served basis.
The high volume of orders that are rapidly submitted to market
makers and specialists from many broker-dealers may create a
backlog that can cause significant delays. As a result, when you
place a market order under these conditions, the quote you get is
more an indication of what has already happened than that of the
execution price you will receive.

In the time between when your order is placed and when it is
executed, other orders already in line ahead of yours can adjust
the stock/option price and movement. There are also significant
delays between an initial partial execution you receive, which
may be an automatic execution, and the subsequent fill of the
balance of a larger order, which may be executed manually. Many
market makers offer automatic execution for eligible securities
up to certain size positions (10 contracts is the standard number
for auto execution of an option order). However, during volatile
market conditions, that feature may be modified or suspended for
some or all issues. Under those circumstances, delays may result
and order executions can occur at prices less favorable than the
originally quoted.

If you place a trade order during a volatile market, there is no
guarantee that your order will be executed. Entering a limit
order merely allows you to establish a buy price at the maximum
you are willing to pay, or a sale price at the lowest you are
willing to receive. Even when the market moves to your limit
price, there is no guarantee that you order will be executed
because there may be limit orders from other customers ahead of
yours. During a fast market, it is recommended that you don't
attempt to change or cancel limit orders. Change or cancel orders
do not expedite trade reports in a fast market; they actually
burden the system with more information to process. If you enter
a change, the broker will process your request on a best-efforts
basis and that change will probably result in your order moving
to the back of the line.

The safest way to trade in a fast market is to find a dependable
broker (there are many!) and make your desires very clear so that
they can effectively execute the transaction that you are paying
them to perform.

Good luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS
******************************************************************
Stock  Price  Last    Mon  Strike  Opt   Profit    ROI   Monthly
Sym    Picked Price        Price   Bid   /Loss           ROI

DIMD    5.06   5.03   Jul   5.00  0.63  *$  0.57  12.9%  14.0%
SQNT   13.75  16.88   Jul  12.50  2.38  *$  1.13   9.9%  10.8%
GISX   18.25  18.38   Jul  17.50  1.88  *$  1.13   6.9%  10.0%
NMSS    8.13  10.00   Jul   7.50  1.38  *$  0.75  11.1%   9.7%
VVTV   19.00  20.63   Jul  17.50  2.56  *$  1.06   6.4%   9.3%
FFD    16.38  16.13   Jul  15.00  2.50  *$  1.12   8.1%   8.8%
FIBR   12.63  13.94   Jul  10.00  3.25  *$  0.62   6.6%   7.2%
SAVLY  15.75  14.63   Jul  12.50  4.00  *$  0.75   6.4%   6.9%
TKLC   12.06  12.00   Jul  10.00  2.75  *$  0.69   7.4%   6.4%
ENZN   16.88  20.25   Jul  15.00  2.50  *$  0.62   4.3%   6.2%
PERI   15.13  16.13   Jul  12.50  3.13  *$  0.50   4.2%   6.0%
LWIN   20.06  19.88   Jul  17.50  3.25  *$  0.69   4.1%   5.9%
PRGN   24.75  26.38   Jul  22.50  3.13  *$  0.88   4.1%   5.9%
CPU     8.38   7.56   Jul   7.50  1.44  *$  0.56   8.1%   5.8%
CAST   15.94  16.00   Jul  15.00  1.88  *$  0.94   6.7%   5.8%
SKYC   17.06  17.88   Jul  15.00  2.63  *$  0.57   4.0%   5.7%
AMES   47.50  46.16   Jul  45.00  4.75  *$  2.25   5.3%   5.7%
PILL   13.88  15.00   Jul  12.50  2.13  *$  0.75   6.4%   5.5%
KMET   20.88  22.75   Jul  20.00  2.06  *$  1.18   6.3%   5.4%
AVIR   22.75  27.69   Jul  20.00  4.13  *$  1.38   7.4%   5.4%
GSTX   14.00  14.75   Jul  12.50  1.94  *$  0.44   3.6%   5.3%
AAC     7.69   7.81   Jul   7.50  0.69  *$  0.50   7.1%   5.2%
NSM    25.00  25.63   Jul  22.50  3.25  *$  0.75   3.4%   5.0%
CBTSY  16.50  16.75   Jul  15.00  2.44  *$  0.94   6.7%   4.8%
THNK   17.19  14.50   Jul  15.00  3.25   $  0.56   4.0%   4.4%
ARTT   14.69  14.06   Jul  12.50  2.75  *$  0.56   4.7%   4.1%
THNK   17.19  14.50   Jul  12.50  5.13  *$  0.44   3.6%   4.0%
DUSA    9.75  11.31   Jul   7.50  2.56  *$  0.31   4.3%   3.7%

Closed this week: 

*   PTEK; stock price closed below $11.00 (150 dma) on Monday.

Previously closed: 

*   CYOE; bullish trend reversed, downgraded
*   VLNC; broke 150 dma, now positive - news helped
*   NOVT; broke 150 dma, now positive - holding above $20

Unplayable (and extremely positive):

*   MCOM...sure wish we had just bought the stock (or call)!

-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

FIBR   14.00  Jul 12.50  QFW GV  2.00  1014  12.00   4.17%   4.17%
MRL    13.50  Jul 12.50  MRL GV  1.63  4144  11.87   5.31%   5.31%
NETG   25.25  Jul 22.50  NUG GX  3.63  834   21.62   4.07%   4.07%
PRGN   26.38  Jul 25.00  GQP GE  2.25  799   24.13   3.61%   3.61%
SQNT   16.94  Jul 15.00  SQQ GC  2.50  3692  14.44   3.88%   3.88%
------------------------------------------------------------------
FRTE   11.63  Aug 10.00  RQF HB  2.75  60     8.88  12.61%  12.61%
IRF    13.19  Aug 12.50  IRF HV  1.63  31    11.56   8.13%   8.13%
SNRS   13.06  Aug 10.00  RNU HB  4.38  2147   8.68  15.21%  15.21%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

MRL    13.50  Jul 12.50  MRL GV  1.63  4144  11.87   5.31%   5.31%
FIBR   14.00  Jul 12.50  QFW GV  2.00  1014  12.00   4.17%   4.17%
NETG   25.25  Jul 22.50  NUG GX  3.63  834   21.62   4.07%   4.07%
SQNT   16.94  Jul 15.00  SQQ GC  2.50  3692  14.44   3.88%   3.88%
PRGN   26.38  Jul 25.00  GQP GE  2.25  799   24.13   3.61%   3.61%
------------------------------------------------------------------
SNRS   13.06  Aug 10.00  RNU HB  4.38  2147   8.68  15.21%  15.21%
FRTE   11.63  Aug 10.00  RQF HB  2.75  60     8.88  12.61%  12.61%
IRF    13.19  Aug 12.50  IRF HV  1.63  31    11.56   8.13%   8.13%
******************************************************************
Company Descriptions
******************************************************************
FIBR - Osicom Technologies, Inc.  $14.00  *** Back For More ***

Osicom Tech designs, manufactures and markets optical networking 
products for use in intra-city or metropolitan networks. We will
try Osicom again as the $12.50 call offers favorable downside
protection and a reasonable two week return. Osicom took a nose 
dive in April over alleged misleading contracts/purchase orders;
another exercise in money management. A few bullish divergence's
remain and FIBR has moved above the June high (and the 150 dma).

Jul 12.50 QFW GV Bid=2.00 OI=1014 CB=12.00 RC=4.17% RNC=4.17%

Chart = http://quote.yahoo.com/q?s=FIBR&d=3m
******************************************************************
MRL - Marine Drilling Co., Inc. $13.50   *** Oil Sector ***

Marine Drilling is engaged in offshore domestic and international 
contract drilling of oil and gas wells. MRL's rig fleet is one
of the largest in the world with a fleet of 17 offshore drilling 
rigs consisting of 15 jackups located in the U.S. Gulf of Mexico
and certain international markets. News on Tuesday reported the
status of the new Marine 500 and 700 drilling rigs. Marine 
Drilling has consolidated after the April high and appears ready
to move above the recent trading range.

Jul 12.50 MRL GV Bid=1.63 OI=4144 CB=11.87 RC=5.31% RNC=5.31%

Chart = http://quote.yahoo.com/q?s=mrl&d=3m
******************************************************************
NETG - NetGravity, Inc. $25.25   *** Here We Go Again ***

NetGravity, Inc. is a provider of online advertising and direct 
marketing software solutions. NETG develops, markets and supports
a mission-critical Adserver family of software products. On 7/2,
NETG announced that Howard W. Smith (GM/CE of Standard&Poor's
Compustat) joined its board of directors. The month of June had
a string of news releases as NetGravity formed a base. Friday's
close above the 150 dma (and the June highs) make this a very
favorable two week play.

Jul 22.50 NUG GX Bid=3.63 OI=834 CB=21.62 RC=4.07% RNC=4.07%

Chart = http://quote.yahoo.com/q?s=netg&d=3m
******************************************************************
PRGN - Peregrine Systems Inc. $26.38
 
PRGN is a provider of IT infrastructure management solutions 
through the development, marketing and supporting of the 
ServiceCenter and AssetCenter product lines. Peregrine recently
announced a technology integration alliance with SERENA Software
to deliver an automated solution for identifying and resolving
desktop configuration problems. PRGN's ServiceCenter® 3.0, was
picked as an "Editors' Choice" in C@ll Center Solutions magazine.
Thursday, PRGN announced an alliance with Avesta Technologies,
a leading developer of IT service level management solutions.

Jul 25.00 GQP GE Bid=2.25 OI=799 CB=24.13 RC=3.61% RNC=3.61%

Chart = http://quote.yahoo.com/q?s=prgn&d=3m
******************************************************************
SQNT - Sequent Computer Systems  $16.94   *** Take Over ***

Sequent, the leader in Intel-based solutions for the data center, 
designs, manufactures, and markets high performance symmetric 
multiprocessing and CC-NUMA computer systems and operating 
environment  software.  Sequent supports more than 10,000 
installations worldwide, including many of the world's largest
and most sophisticated OLTP, DSS and RDBMS applications. IBM is 
in advanced talks to acquire the small computer company and a
deal could be announced in the next few days. We will speculate
for two weeks with our cost basis near support.

Jul 15.00 SQQ GC Bid=2.50 OI=3692 CB=14.44 RC=3.88% RNC=3.88%

Chart = http://quote.yahoo.com/q?s=sqnt&d=3m
******************************************************************
FRTE - Forte Software, Inc.  $11.63   *** Break-out! ***

FRTE develops, designs, markets and supports Forte, a software 
application development that enables businesses to create, 
integrate, customize, manage, and deploy applications across 
multiplatform networks for thousands of users simultaneously. 
Recent news added Nu Skin Enterprises to a list of users who will
use FORTE in their web applications. FRTE has broken above the 
neckline of a long term (2 year chart) head-n-shoulders bottom;
the longer the formation - the stronger the meaning! FRTE is
overextended in the short term, but we like the cost basis near
the H-n-S neckline and the favorable long-term outlook.

Aug 10.00 RQF HB Bid=2.75 OI=60 CB=8.88 RC=12.61% RNC=12.61%

Chart = http://quote.yahoo.com/q?s=frte&d=3m
******************************************************************
IRF - International Rectifier  $13.19  *** Stage II ***

IRF designs, manufactures and markets power semiconductors, 
including control integrated circuits, diodes, rectifiers, and 
power MOSFETS which are used for power conversion. Not much news
to accompany the recent run-up after posting earnings in April.
Technically bullish chart as IRF has completed a double-bottom. 
We view this as a favorable long-term play with a cost basis near
technical support. A conference call is scheduled for July 27.

Aug 12.50 IRF HV Bid=1.63 OI=31 CB=11.56 RC=8.13% RNC=8.13%

Chart = http://quote.yahoo.com/q?s=irf&d=3m
******************************************************************
SNRS - Sunrise Tech. Int'l, Inc.  $13.06 

Sunrise Tech. develops, manufactures and markets laser systems 
and other products for applications in ophthalmology. They are
developing a laser thermal keratoplasty (LTK) system to reshape 
corneas for treating hyperopia (farsightedness), currently in
use in Europe and the Americas, and is in clinical trials in
the U.S. The FDA has scheduled July 22 for review Sunrise Tech's
PMA for the their LTK System. The recent volatility of the
stock has inflated premiums and provides an entry point with
a cost basis below support.

Aug 10.00 RNU HB Bid=4.38 OI=2147 CB=8.68 RC=15.21% RNC=15.21%

Chart = http://quote.yahoo.com/q?s=snrs&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.

Volume was not available from CBOE at press time.

Stock Price Month Strike Symbol  Price PctRtn OpnInt Vol
PQT     7.50 Jul   7.50  PQTGU    0.75  10.00    78   *
PQT     7.50 Aug   7.50  PQTHU    1.63  21.67   156
MGCX   24.00 Aug  25.00  MGUHE    4.38  18.23    82
CFN     3.50 Aug   5.00  CFNHA    0.63  17.86    49
DCTM   12.19 Aug  12.50  QDCHV    2.13  17.44    50
FIBR   13.94 Aug  15.00  QFWHC    2.38  17.04  1290
BAMM   11.75 Aug  12.50  QMZHV    2.00  17.02   470
VIAS    4.81 Aug   5.00  QVVHA    0.81  16.88   471
OXGN    9.63 Aug  10.00  QYOHB    1.56  16.23    45
MXG     9.00 Aug  10.00  MXGHB    1.44  15.97    25
CLPA   12.19 Aug  12.50  QJCHV    1.94  15.90    41
IRID    9.44 Aug  10.00  QAKHB    1.50  15.89  1089
SNRS   13.00 Aug  15.00  RNUHC    2.06  15.87  2468
MCNS    9.91 Aug  10.00  UCSHB    1.56  15.77    93
NMSS   10.00 Aug  10.00  YYQHB    1.56  15.63   220
EFAX   12.44 Aug  12.50  FUWHV    1.94  15.58    72
TGLO   19.06 Aug  20.00  GLUHD    2.88  15.08   148
GBTVK   7.50 Aug   7.50  GBQHU    1.13  15.00   200
DGN    17.31 Aug  17.50  DGNHW    2.56  14.80  1413
SBTK   22.00 Aug  22.50  XQYHX    3.25  14.77   735
PAMC   29.25 Aug  30.00  QMCHF    4.25  14.53   102
NSPK   12.50 Aug  12.50  NNQHV    1.81  14.50   196
LTBG   12.38 Aug  12.50  LKQHV    1.75  14.14    60
ZONA    9.75 Aug  10.00  NQZHB    1.38  14.10    81
VTA     4.88 Aug   5.00  VTAHA    0.69  14.10   217
QMDC    8.88 Aug  10.00  QCDHB    1.25  14.08  1022
MTSN   12.44 Aug  12.50  QQMHV    1.75  14.07    54
SQNT   16.88 Aug  17.50  SQQHW    2.38  14.07  1066
KLOC    7.13 Aug   7.50  KCUHU    1.00  14.04   112
IDXC   22.25 Aug  22.50  XQWHX    3.13  14.04    51
BTIM   12.50 Aug  12.50  QBOHV    1.75  14.00   263
BYND   27.81 Aug  30.00  QYDHF    3.88  13.93   226
ITIG    6.75 Aug   7.50  ITUHU    0.94  13.89    30
EMIS    7.25 Aug   7.50  MTQHU    1.00  13.79     3
PZN    10.00 Aug  10.00  PZNHB    1.38  13.75   712
IDTC   22.06 Aug  22.50  IQJHX    3.00  13.60   233
HMK     6.06 Aug  10.00  HMKHB    0.81  13.40    70
HEPH   11.81 Aug  12.50  HUPHV    1.56  13.23    52
TIER    6.63 Aug   7.50  QTIHU    0.88  13.21    77
MESG   18.00 Aug  20.00  MUGHD    2.38  13.19    52
KNDL   15.88 Aug  17.50  KQRHW    2.06  12.99   118
ERTH    7.25 Aug   7.50  QERHU    0.94  12.93    72
LWIN   19.88 Aug  20.00  UINHD    2.56  12.89    20
PRGY   24.56 Aug  25.00  PUYHE    3.13  12.72    42
USWB   24.63 Aug  25.00  QWBHE    3.13  12.69   598
PRMS    7.44 Aug   7.50  RQSHU    0.94  12.61   144
NTPA   23.81 Aug  25.00  NQDHE    3.00  12.60    62
AGS    12.44 Aug  12.50  AGSHV    1.56  12.56     5
GYMB   10.00 Aug  10.00  GMQHB    1.25  12.50    15
NETS   16.00 Aug  17.50  NTUHW    2.00  12.50   309
CYBX   12.00 Aug  12.50  QAJHV    1.50  12.50    70
ACAI   20.00 Aug  20.00  QKAHD    2.50  12.50   372
WHIT   28.09 Aug  30.00  WMQHF    3.50  12.46    89
NAVR    9.56 Aug  10.00  QHQHB    1.19  12.42   130
BEST   16.13 Aug  17.50  BUTHW    2.00  12.40     8
SPCT   14.13 Aug  15.00  QCSHC    1.75  12.39   193
IMAL   19.75 Aug  20.00  IUMHD    2.44  12.34   147
GSTX   14.75 Aug  15.00  QGSHC    1.81  12.29   278
CS     12.31 Aug  12.50   CSHV    1.50  12.18   790
TNFI    9.75 Aug  10.00  QFIHB    1.19  12.18   114
IDX     9.25 Aug  10.00  IDXHB    1.13  12.16   149
DUSA   11.31 Aug  12.50  QDUHV    1.38  12.15    49
BXM    24.75 Aug  25.00  BXMHE    3.00  12.12   543
ETV     6.75 Aug   7.50  ETVHU    0.81  12.04   243
OCLR   17.13 Aug  17.50  QLOHW    2.06  12.04    72
PRST    7.28 Aug   7.50  PQKHU    0.88  12.02    74
ICO    12.50 Aug  12.50  ICOHV    1.50  12.00    81
PTVL   22.94 Aug  25.00  QUTHE    2.75  11.99   249
SPYG   19.81 Aug  20.00  YQGHD    2.38  11.99   185
CGZ     7.31 Aug   7.50  CGZHU    0.88  11.97   111
SFAM   16.91 Aug  17.50  FQFHW    2.00  11.83   135
KERA   17.50 Aug  17.50  KVQHW    2.06  11.79   369
CYGN   11.78 Aug  12.50  YNQHV    1.38  11.67    54
UNFY   13.94 Aug  15.00  UFUHC    1.63  11.66   177
SBTK   22.00 Aug  25.00  XQYHE    2.56  11.65   615
NFLD   12.38 Aug  12.50  DHQHV    1.44  11.62   281
EGHT    4.31 Aug   5.00  EDQHA    0.50  11.59  4615
SNRS   13.00 Aug  17.50  RNUHW    1.50  11.54   187
CCBL   29.38 Aug  30.00  LQEHF    3.38  11.49    20
ENMD   21.75 Aug  22.50  QMAHX    2.50  11.49   115
RG     17.44 Aug  17.50   RGHW    2.00  11.47    90
APOS    6.00 Aug   7.50  QAPHU    0.69  11.46    28
CYMI   24.56 Aug  25.00  CQGHE    2.81  11.45  1104
SPLH    7.13 Aug   7.50  QRXHU    0.81  11.40    42
CYTC   20.00 Aug  20.00  YQKHD    2.25  11.25    78
ANSR   23.38 Aug  25.00  QRAHE    2.63  11.23    45
BAMM   11.75 Aug  15.00  QMZHC    1.31  11.17   664
KING   24.69 Aug  25.00  QBKHE    2.75  11.14     5
SBTK   22.00 Aug  27.50  XQYHY    2.44  11.08    65
MMWW   24.31 Aug  25.00  EQBHE    2.69  11.05   321
PZX     9.63 Aug  10.00  PZXHB    1.06  11.04    99
WALL    9.69 Aug  10.00  WLQHB    1.06  10.97    47
SKI     4.56 Aug   5.00  SKIHA    0.50  10.96   281
IACO    4.00 Aug   5.00  IAUHA    0.44  10.94   267
QNTM   24.56 Aug  25.00  QNQHE    2.69  10.94  4695
PSSI   11.44 Aug  12.50  PYQHV    1.25  10.93   671
SGI    17.19 Aug  17.50  SGIHW    1.88  10.91 14969
HLYW   19.50 Aug  20.00  HWQHD    2.13  10.90   570
PHYC    6.91 Aug   7.50  PQHHU    0.75  10.86    25
PQT     7.50 Aug  10.00  PQTHB    0.81  10.83   391
ELN    28.88 Aug  30.00  ELNHF    3.13  10.82   647
RMII   12.13 Aug  12.50  RMUHV    1.31  10.82    87
REV    29.00 Aug  30.00  REVHF    3.13  10.78   182
CMTO   18.00 Aug  20.00  CQHHD    1.94  10.76   140
OMKT   14.63 Aug  15.00  OQMHC    1.56  10.68  3177
HEB     7.06 Aug   7.50  HEBHU    0.75  10.62   974
ESON    7.06 Aug   7.50  QENHU    0.75  10.62    16
IRID    9.44 Aug  12.50  QAKHV    1.00  10.60  2373
ASTX   22.50 Aug  22.50  AUTHX    2.38  10.56    20
CEPH   17.22 Aug  17.50  CQEHW    1.81  10.53   369
FBG    11.88 Aug  12.50  FBGHV    1.25  10.53    71
OSTE   28.50 Aug  30.00  OQQHF    3.00  10.53   489
IMRS   19.00 Aug  20.00  QIQHD    2.00  10.53   110
ALYD    2.38 Aug   5.00  QLIHA    0.25  10.53   883
TSA     4.75 Aug   5.00  TSAHA    0.50  10.53    20
Z       9.50 Aug  10.00    ZHB    1.00  10.53  3540
CMNT   22.00 Aug  22.50  QDOHX    2.31  10.51   186
CDO    26.19 Aug  27.50  CDOHY    2.75  10.50   111
TGLO   19.06 Aug  22.50  GLUHX    2.00  10.49   294
ROSI    6.56 Aug   7.50  QRSHU    0.69  10.48   416
PERI   16.13 Aug  17.50  HQSHW    1.69  10.47   155
BCU     7.19 Aug   7.50  BCUHU    0.75  10.43  3070
ADAP   21.56 Aug  22.50  CQIHX    2.25  10.43    10
OTEX   30.00 Aug  30.00  QFTHF    3.13  10.42   129
GHV     3.63 Aug   5.00  GHVHA    0.38  10.34     7
AFLX    3.63 Aug   5.00  XFQHA    0.38  10.34   473
CEXP    7.25 Aug   7.50  XQPHU    0.75  10.34  1085
JDAS    9.69 Aug  10.00  QAHHB    1.00  10.32    60
TMCS   29.13 Aug  30.00  QMFHF    3.00  10.30    13
SGE     6.69 Aug   7.50  SGEHU    0.69  10.28   101
GNSS   23.13 Aug  25.00  QFEHE    2.38  10.27    18
CGZ     7.31 Aug  10.00  CGZHB    0.75  10.26    41
EGGS   12.19 Aug  12.50  EGQHV    1.25  10.26   695
PCYC   26.81 Aug  30.00  QPYHF    2.75  10.26    22
CERN   19.53 Aug  20.00  CQNHD    2.00  10.24   322
HDL    11.63 Aug  12.50  HDLHV    1.19  10.22    11
LIPO   19.56 Aug  20.00  LPQHD    2.00  10.22   231
IDTC   22.06 Aug  25.00  IQJHE    2.25  10.20   375
ADEX   12.25 Aug  12.50  QDEHV    1.25  10.20    32
AVNT   12.28 Aug  12.50  NVQHV    1.25  10.18    15
DJT     4.94 Aug   5.00  DJTHA    0.50  10.13    66
ECLP   21.00 Aug  25.00  IQVHE    2.13  10.12   106
FC      7.44 Aug   7.50   FCHU    0.75  10.08    10
ABTE    7.44 Aug   7.50  QZBHU    0.75  10.08   301
DSP    29.81 Aug  30.00  DQCHF    3.00  10.06   374
PGA     9.94 Aug  10.00  PGAHB    1.00  10.06    29
PSFT   17.44 Aug  17.50  PQOHW    1.75  10.04   550
FLH    11.25 Aug  12.50  FLHHV    1.13  10.00    95
MUI    12.50 Aug  12.50  MUIHV    1.25  10.00    23
HYPT   18.75 Aug  20.00  QPIHD    1.88  10.00    35
ETV     6.75 Sep   7.50  ETVIU    1.38  20.37   363
MCHM    6.38 Sep   7.50   QQIU    1.25  19.61   244
PGA     9.94 Sep  10.00  PGAIB    1.94  19.50   119
BTIM   12.50 Sep  12.50  QBOIV    2.44  19.50   460
EMIS    7.25 Sep   7.50  MTQIU    1.38  18.97   231
IDTC   22.06 Sep  22.50  IQJIX    4.13  18.70   209
MRVT    7.25 Sep   7.50  SQDIU    1.31  18.10    55
IDX     9.25 Sep  10.00  IDXIB    1.63  17.57  1436
DGN    17.31 Sep  17.50  DGNIW    3.00  17.33  1691
SMTL    9.75 Sep  10.00  PQDIB    1.63  16.67   153
DUSA   11.31 Sep  12.50  QDUIV    1.88  16.57    77
PRGY   24.56 Sep  25.00  PUYIE    4.00  16.28   207
GNSS   23.13 Sep  25.00  QFEIE    3.75  16.22    51
ROSI    6.56 Sep   7.50  QRSIU    1.06  16.19   229
BYND   27.81 Sep  30.00  QYDIF    4.50  16.18  1384
CFN     3.50 Sep   5.00  CFNIA    0.56  16.07   199
PCYC   26.81 Sep  30.00  QPYIF    4.25  15.85    20
GHV     3.63 Sep   5.00  GHVIA    0.56  15.52  1032
MMWW   24.31 Sep  25.00  EQBIE    3.75  15.42  1331
EGGS   12.19 Sep  12.50  EGQIV    1.88  15.38  1171
DJT     4.94 Sep   5.00  DJTIA    0.75  15.19   705
VLNC    7.09 Sep   7.50  VHQIU    1.06  14.98  1228
ONSL   25.25 Sep  30.00  QOLIF    3.75  14.85   517
IDTC   22.06 Sep  25.00  IQJIE    3.25  14.73   571
FA     12.25 Sep  12.50   FAIV    1.75  14.29    60
CYCH   13.13 Sep  15.00  KBQIC    1.88  14.29   443
PPOD    8.88 Sep  10.00  QPPIB    1.25  14.08   802
GSTX   14.75 Sep  15.00  QGSIC    2.06  13.98   428
IONA   16.00 Sep  17.50  YWQIW    2.19  13.67    68
PHYC    6.91 Sep   7.50  PQHIU    0.94  13.57   331
GEMS    5.09 Sep   7.50  GQMIU    0.69  13.50   303
UBS     9.31 Sep  10.00  UBSIB    1.25  13.42  1848
ESV    19.31 Sep  20.00  ESVID    2.56  13.27   954
ICGX   23.13 Sep  25.00  QIGIE    3.00  12.97   711
ASPT    9.94 Sep  10.00  ATQIB    1.25  12.58   539
ZDZ    25.88 Sep  30.00  ZDZIF    3.25  12.56   197
PAGE    6.00 Sep   7.50  PGQIU    0.75  12.50  3153
VIRS   16.50 Sep  17.50  VQPIW    2.06  12.50    39
FEET    6.03 Sep   7.50  JQFIU    0.75  12.44   248
HMK     6.06 Sep   7.50  HMKIU    0.75  12.37    14
NVX     5.06 Sep   7.50  NVXIU    0.63  12.35   159
PGNS   13.75 Sep  15.00  PHQIC    1.69  12.27   218
GLBL   12.25 Sep  12.50  GQOIV    1.50  12.24  2175
TDFX   15.38 Sep  17.50   FQIW    1.88  12.20   414
CERN   19.53 Sep  20.00  CQNID    2.38  12.16   193
HCIA    9.50 Sep  10.00  ZHQIB    1.13  11.84   111
NPTH    4.25 Sep   5.00  DQWIA    0.50  11.76   205
CATP   17.63 Sep  20.00  TQPID    2.06  11.70  1269
SEM     8.56 Sep  10.00  SEMIB    1.00  11.68    11
ATMI   29.50 Sep  30.00  ASQIF    3.38  11.44   114
GSTRF  24.06 Sep  25.00  YVQIE    2.75  11.43  1273
NETA   16.44 Sep  17.50  CQMIW    1.88  11.41  1307
ESPI   11.00 Sep  12.50   AQIV    1.25  11.36  2385
NE     19.25 Sep  20.00   NEID    2.19  11.36  1318
ASMI    7.25 Sep   7.50  IQBIU    0.81  11.21   200
ZRAN   17.88 Sep  20.00  ZUOID    2.00  11.19    58
ESA    11.75 Sep  12.50  ESAIV    1.31  11.17   114
BEAM   20.16 Sep  22.50  BAQIX    2.25  11.16   507
INVN    4.50 Sep   5.00  VYQIA    0.50  11.11    82
ELIX   14.06 Sep  15.00  XQQIC    1.56  11.11    35
PSUN   24.81 Sep  25.00  PVQIE    2.75  11.08     3
MAST   18.06 Sep  20.00  QACID    2.00  11.07   145
NN     29.44 Sep  30.00   NNIF    3.25  11.04   592
ROMC    8.50 Sep  10.00  RPQIB    0.94  11.03   215
BTIM   12.50 Sep  15.00  QBOIC    1.38  11.00   422
EAII   22.81 Sep  25.00  QNEIE    2.50  10.96   155
CERN   19.53 Sep  22.50  CQNIX    2.13  10.88   422
PTEL   29.94 Sep  30.00  IQFIF    3.25  10.86    69
DGN    17.31 Sep  20.00  DGNID    1.88  10.83  1086
KOPN   23.88 Sep  25.00  KQOIE    2.56  10.73   161
CFN     3.50 Sep   7.50  CFNIU    0.38  10.71   315
CRUS    8.75 Sep  10.00  CUQIB    0.94  10.71   724
TWTC   26.38 Sep  30.00  TTUIF    2.81  10.66   111
OCN     8.25 Sep  10.00  OCNIB    0.88  10.61    31
PAP     9.44 Sep  10.00  PAPIB    1.00  10.60  1090
APEX   21.88 Sep  22.50  PXQIX    2.31  10.57    27
FBG    11.88 Sep  15.00  FBGIC    1.25  10.53   188
IDC     4.75 Sep   5.00  IDCIA    0.50  10.53  5289
OCA    14.25 Sep  15.00  OCAIC    1.50  10.53   183
CSGS   28.50 Sep  30.00  QGAIF    3.00  10.53   248
ASYT   28.50 Sep  30.00  QQYIF    3.00  10.53   230
CHRZ   13.69 Sep  15.00  ZQHIC    1.44  10.50   641
SKYC   17.88 Sep  20.00  KQFID    1.88  10.49    73
HBI     6.06 Sep   7.50  HBIIU    0.63  10.31   701
RAYS   17.06 Sep  17.50  RQYIW    1.75  10.26   110
PRXL   12.88 Sep  15.00  VBQIC    1.31  10.19   125
PLXS   29.97 Sep  30.00  QUAIF    3.00  10.01   745






*****************
NAKED PUT SECTION
*****************
More On Option Trading Basics...

Each week, I receive an overwhelming number of basic questions
about stock options. Here are some common facts that you should
understand before you begin trading:

Options expire on the Saturday following the third Friday of
the expiration month, although the third Friday is the last day
of trading. Option trades have a one-day settlement. The trade
settles on the next business day after the trade. When you buy
an option, it must be paid for in full, and the credits from
sales are posted to the account the very next day. All options
are quoted on a per-share basis, regardless of how many shares
of stock the option involves. Normally the quote assumes 100
shares of the underlying stock. When the underlying stock pays
dividend or splits, the terms of its options are adjusted. This
may result in fractional strike prices or options for other than
100 shares per contract. When this occurs, the exchange also
publishes a new quote symbol for each new series. As time passes,
the fractional strikes are eliminated as they expire. Changes
in the price of the underlying stock will generate new strike
prices. A new series is usually opened when the stock trades at
the lowest (or highest) existing strike in any series.

Placing an order:

When you place an option order, you must specify; whether the
order is a "buy" or a "sell", the option to be bought or sold,
whether the trade is an opening or closing position and the
desired price. There are also specific types of orders to help
you buy based on certain conditions or requirements:

"Market" orders are simple orders to buy or sell the option at
the best possible price as soon as the order is received at the
exchange. "Limit" orders are used to buy or sell at a specific
price. It may be executed at a better price than the limit but
if the limit is never reached, the order may never be executed.
A "Good-until-canceled" order in a limit, stop, or stop-limit
order remains valid for up to 6 months without renewal if the
conditions for the order execution do not occur. A "Stop" order
becomes a market order when the security trades at or through
the price specified on the order. "Buy Stop" orders are placed
above the current price, and "Sell Stop" orders are used below
the current price. Such orders are used to either limit loss or
protect a profit. This order is not always valid on all option
exchanges and is usually ineffective on fast moving issues like
Internet stocks. A "Stop-Limit" order becomes a "limit" order
when the specified price is reached. Whereas the "Stop" order
has to be executed as soon as the 'stop price' is reached, the
"Stop-Limit" may or may not be filled, depending on the market.
This type of order is generally used to open a position rather
than to close it. There are many other types of orders that can
be used when trading with a full service broker such as "Market
Not Held" or "Market On Close". Those are some of the benefits
of having a floor agent working on your behalf in the execution
of trades.

Good Luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS 
******************************************************************
Stock  Price  Last    Mon  Strike  Opt   Profit    ROI   Monthly
Sym    Picked Price        Price   Bid   /Loss           ROI

CUST   50.06  53.88   Jul  35.00  1.13  *$  1.13  10.1%  14.7%
PILL   13.88  15.00   Jul  12.50  0.81  *$  0.81  16.3%  14.1%
CACS   35.00  42.50   Jul  25.00  0.75  *$  0.75   9.7%  14.0%
MERQ   35.38  38.25   Jul  30.00  0.88  *$  0.88   9.1%  13.2%
SBTK   27.25  22.00   Jul  20.00  0.94  *$  0.94  14.7%  12.8%
PCYC   21.13  26.81   Jul  17.50  0.81  *$  0.81  14.4%  12.5%
RIGS   20.63  20.44   Jul  17.50  0.44  *$  0.44   7.9%  11.5%
ANAD   31.31  34.50   Jul  25.00  0.63  *$  0.63   9.1%   9.9%
STII   25.00  29.44   Jul  20.00  0.50  *$  0.50   9.1%   9.9%
GALT   41.00  49.88   Jul  35.00  0.75  *$  0.75   6.7%   9.7%
CIEN   30.50  31.00   Jul  25.00  0.81  *$  0.81  10.8%   9.4%
SGI    14.63  17.19   Jul  12.50  0.25  *$  0.25   6.3%   9.1%
NE     20.00  19.25   Jul  17.50  0.50  *$  0.50   8.3%   9.1%
PWAV   30.50  32.63   Jul  25.00  0.44  *$  0.44   6.2%   8.9%
REV    30.38  29.00   Jul  22.50  0.69  *$  0.69  10.2%   8.9%
BOBJ   37.00  39.63   Jul  30.00  0.69  *$  0.69   8.1%   8.8%
PRD    27.50  27.75   Jul  22.50  0.38  *$  0.38   6.0%   8.6%
CNTO   50.94  49.75   Jul  40.00  0.81  *$  0.81   7.4%   8.0%
SUGN   22.75  29.94   Jul  17.50  0.44  *$  0.44   8.8%   7.7%
NRES   20.25  22.25   Jul  17.50  0.50  *$  0.50   8.5%   7.4%
CUBE   32.00  33.00   Jul  25.00  0.56  *$  0.56   8.0%   7.0%
CUBE   32.00  33.00   Jul  25.00  0.44  *$  0.44   6.4%   7.0%
TDW    28.75  30.63   Jul  25.00  0.50  *$  0.50   6.1%   6.6%
AMES   47.50  46.16   Jul  40.00  0.69  *$  0.69   5.7%   6.1%
EGRP   37.81  39.94   Jul  25.00  0.56  *$  0.56   6.9%   6.0%

Unplayable:

*   NLC: The news came before Monday's open (Suez Lyonnaise to
    buy Nalco for $4.1 billion); NLC gapped up $9.00.

-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 - formula: premium received divided by
the collateral required by the broker (the greater of 40% of the
current price of the stock plus the premium, minus the difference
between the cost of the stock and the strike price; or 20% of the 
current price of the stock plus the premium.) As you move further
from the stock price, the 20% requirement will take precedence.
ROI may vary based on equity required by each individual broker.
******************************************************************
Sequenced by Company
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

BYND   27.81  Jul 22.50  QYD SX  0.56  1502  21.94   8.79%
EGRP   39.94  Jul 32.50  QGR SZ  0.38  1662  32.12   4.26%
ICGX   23.13  Jul 20.00  QIG SD  0.31  376   19.69   4.82%
NTBK   39.00  Jul 30.00  NQA SF  0.50  420   29.50   6.02%
SBA    27.38  Jul 25.00  SBA SE  0.50  200   24.50   5.51%
SEEK   55.88  Jul 45.00   QI SI  0.88  847   44.12   7.12%
SPLN   34.31  Jul 25.00  QSP SE  0.38  348   24.62   5.25%
----------------------------------------------------------
QNTM   24.56  Aug 17.50  QNQ TW  1.00  883   16.50  16.91%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

BYND   27.81  Jul 22.50  QYD SX  0.56  1502  21.94   8.79%
SEEK   55.88  Jul 45.00   QI SI  0.88  847   44.12   7.12%
NTBK   39.00  Jul 30.00  NQA SF  0.50  420   29.50   6.02%
SBA    27.38  Jul 25.00  SBA SE  0.50  200   24.50   5.51%
SPLN   34.31  Jul 25.00  QSP SE  0.38  348   24.62   5.25%
ICGX   23.13  Jul 20.00  QIG SD  0.31  376   19.69   4.82%
EGRP   39.94  Jul 32.50  QGR SZ  0.38  1662  32.12   4.26%
----------------------------------------------------------
QNTM   24.56  Aug 17.50  QNQ TW  1.00  883   16.50  16.91%
******************************************************************
Company Descriptions
******************************************************************
BYND - Beyond.com Corp.  $27.81   *** Internet Commerce ***

BYND is a leading online reseller of commercial off-the-shelf
computer software to the consumer, small business and large
enterprise markets. Through its online store, BYND offers a
comprehensive selection of software, customer service and
competitive pricing. BYND is the undisputed brand leader in
category (selling software in a digital downloaded form) and
is still rumored to be a takeover target of AMZN.

Jul  22.50  QYD SX  Bid=0.56  OI=1502  CB=21.94  ROI=8.79%

Chart = http://quote.yahoo.com/q?s=BYND&d=3m
******************************************************************
EGRP - E*Trade Group  $39.94     *** #1 In Web Brokers? ***

E*Trade is a leading provider of cost-effective, secure online
discount brokerage services. It offers automated order placement,
portfolio tracking and related market information, news & other
information services 24 hours a day, seven days a week in all
electronic forms. The web site received the most visits in May
according to a recent report but that may be due to the enormous
amount of money they are spending on advertising (bottom line?).
Regardless of how well they execute your trades, the stock should
perform better in the coming weeks with the new influx of traders.

Jul  32.50  QGR SZ  Bid=0.38  OI=1662  CB=32.12  ROI=4.26%

Chart = http://quote.yahoo.com/q?s=EGRP&d=3m
******************************************************************
ICGX - ICG communications  $23.13   *** Telecom Sector ***

ICG Communications is one of the nation's leading integrated
providers of competitive communications services. Through its
competitive local exchange carrier operations, they operate
networks covering major metropolitan statistical areas. They
provide a wide range of network systems integration services,
maritime and international satellite transmission services, a
variety of Internet connectivity and other value-added Internet
services. Excellent technicals (risk/reward) for a two week play.

Jul  20.00  QIG SD  Bid=0.31  OI=376  CB=19.69  ROI=4.82%

Chart = http://quote.yahoo.com/q?s=ICGX&d=3m
******************************************************************
NTBK -  NetBank Inc.  $39.00     *** Internet Banking ***

NetBank owns and operates an Internet bank which operates as an
FDIC insured federal stock bank. They provide convenient, cost
effective and secure banking services to consumers using the
Internet. Customers can access the Bank on a seven-day-a-week,
24-hour-a-day basis from any personal computer, wherever located,
by various electronic methods. After a recent consolidation, NTBK
appears to be back in favor and $29.50 is an excellent price to
own this speculative Internet issue.

Jul  30.00  NQA SF  Bid=0.50  OI=420  CB=29.50  ROI=6.02%

Chart = http://quote.yahoo.com/q?s=NTBK&d=3m
******************************************************************
SBA - Sbarro  $27.38     *** No News Is Good News? ***

SBARRO develops and operates or franchises an international chain
of family-style Italian restaurants. The restaurants are family
oriented cafeteria-style eateries featuring a menu of popular
Italian food, including pizza, pasta dishes, Italian entrees and
desserts. Not much to report on this issue but the recent chart
history is fairly stable and earnings were announced last month.

Jul  25.00  SBA SE  Bid=0.50  OI=200  CB=24.50  ROI=5.51%

Chart = http://quote.yahoo.com/q?s=SBA&d=3m
******************************************************************
SEEK - InfoSeek  $55.88     *** Internet Portals Are Hot! ***

InfoSeek develops and provides branded, comprehensive Web-based
navigational services that help users access and personalize the
vast resources of the Internet. The Company's primary offering,
Infoseek Guide, is a free service targeted at individual users.
New deals for Yahoo and Lycos have propelled this group upward
and the new interest rate bias is offering some relief to the
high priced Internet issues. Friday's gap-up reduced the premium
significantly but a short term correction may offer another
chance at the previous bid range near $1.25 - $1.50.

Jul  45.00  QI SI  Bid=0.88  OI=847  CB=44.12  ROI=7.12%

Chart = http://quote.yahoo.com/q?s=SEEK&d=3m
******************************************************************
SPLN - Sportline USA  $34.31     *** Technicals Only ***

SportsLine USA is a leading Internet-based sports media company
that provides branded, interactive information and programming as
well as merchandise to sports enthusiasts worldwide. The company's
main web site, cbs.sportsline.com, delivers real-time, in-depth 
and compelling sports content and programming that capitalizes on 
the Internet's unique graphical and interactive capabilities. 
Their other Web sites include those devoted to sports superstars 
and to electronic odds and information on major sports events. A 
ten day play on the basing trend near $30.

Jul  25.00  QSP SE  Bid=0.38  OI=348  CB=24.62  ROI=5.25%

Chart = http://quote.yahoo.com/q?s=SPLN&d=3m
******************************************************************
QNTM - Quantum Corp.  $24.56  *** Own This One! ***
        
Quantum designs, develops & markets information storage products,
including quality, high-performance hard disk drives, recording
heads and tape drives. QNTM combines its engineering and design
expertise with other high volume hard disk drive manufacturing
capabilities to produce disk drives that meet the requirements of
workstations, servers, disk arrays, desktop PCs and minicomputers.
QNTM is a unique issue due to the upcoming tracking stock issuance
of its red-hot enterprise storage unit through its DLT tape drive
business. The cost basis is a technically favorable price to own
this one.

Aug  17.50  QNQ TW  Bid=1.00 OI=883  CB=16.50  ROI=16.91%

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

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





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