Option Investor

Daily Newsletter, Sunday, 07/18/1999

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The Option Investor Newsletter            Sunday  7-18-99  1 of 7
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

         WE 7-16          WE 7-9           WE 7-2           WE 6-25
DOW     11209.84 + 16.14 11193.70 + 54.46  11139.24 +586.68 -303.00
Nasdaq   2864.48 + 71.41  2793.07 + 52.05   2741.02 +188.37 - 10.79
S&P-100   733.79 + 10.91   722.88 +  6.66    716.28 + 44.99 - 12.18
S&P-500  1418.78 + 15.50  1403.28 + 12.06   1391.22 + 75.91 - 27.53
RUT       465.26 +  7.28   457.98 +  1.47    456.51 + 13.40 -  1.94
TRAN     3401.87 - 25.45  3427.32 - 88.67   3515.99 +199.88 - 80.23
VIX        18.13            19.09             18.85           22.61
Put/Call     .46              .46               .47             .53

Impending boom or impending bust?

It depends on who you talk to but the actions of the Dow for the
last two weeks are becoming increasingly disturbing. That loud noise
you heard Friday afternoon was the Dow hitting the upper limit of
our recent trading range, 11200, and stalling again. The Dow closed
at 11,201 at exactly 4:PM but inched up another 8 points as late
trades were settled. This was the second record close this week but
don't start celebrating just yet. The total points gained this week
were only +16. That's right, only +16 points for the week. Remember
this was the week that saw very benign PPI, CPI, Retail Sales, 
Jobless claims, etc, etc. The market should be blowing out to the
upside according to conventional wisdom. Instead the chart below
shows the dead stop and the extremely narrow trading range. 


The Dow this week was held up by the Nasdaq which hit three new
record highs. The earnings this week were very good with many
companies beating the street by big numbers. Next week will be
very important to the future of any rally. 


As you can see by this Dow chart, not only has the Dow stalled
but the advance/decline line is now definitely trending lower.
Again, this is very disturbing in light of the strong earnings
season in progress.


The Nasdaq looks really strong but if you look behind the numbers
on Friday you will see that of the top four Nasdaq stocks only
one was positive. Microsoft was up +5.06 on news of a win in
the trial against Bristol Technology AND news that they may create
a tracking stock for their Internet businesses. This was an
exception and likely a one day event. The other three pillars
of the Nasdaq traded down even with MSFT soaring. INTC -.56,
DELL -.69, CSCO -.56. This is not a good sign!


The most troubling factor to market technicians is the very 
low volatility. The VIX hit a twelve-month low of 17.7 intraday 
on Friday. The last time the VIX was this low was the day before
the start of the July/August crash last year.

If you doubt the relationship between the VIX and the DOW simply
examine the two year VIX/DOW charts below. There is an exact
inverse relationship between the two.

Remember the old saying, "when the VIX is high it is time to
buy, when the VIX is low it is time to go." 

This is a very critical week. With millions of traders sitting
with their finger on the sell trigger, watching for signs of
a repeat of the last two years drops, every market event will be
crucial. The only two events that should impact the market
are the Housing Starts on Wednesday and the Greenspan testimony
on Thursday. Housing starts could show an increase or decrease 
in the growth of the economy. This number is watched by the Fed.

Clearly the biggest event will be the Greenspan testimony to the
house banking committee on Thursday. There is a strong feeling
by some analysts that Greenspan will "bless" the recent CPI/PPI
numbers and claim inflation to be non-existent and therefore
kill any worries of another rate hike this year. The other side
of the coin would be the camp that expects him to continue to be
cautious and warn again that the Fed stands ready to continue
raising rates to "preempt" any inflation problems. (and keep the
stock market in check)

The Dow on Friday was held up not only by the Nasdaq but also 
by the July options expirations. With the major move up from 
10,500 in June there were many call sellers forced to cover their
positions last week. In spite of the heavy options covering we
still were only able to add +23 points and traded in negative 
territory over half the day. Last Sunday I talked about the S&P,
DOW and Nasdaq setting new highs two Fridays in a row and could
we dare ask for three. We got the three, a triple triple, but you
could not have seen it from the internals. The declines beat
advances and were picking up speed at days end. Declining market
breadth could be the first signs of the crack in the bulls armor.
Secondly, the OEX (S&P-100) and the SPX (S&P-500) were both up
on the big Microsoft gain. Microsoft is the biggest company in
either index and will impact both strongly. MSFT is 9% of the
OEX. Take away the MSFT gains on Friday and the OEX, SPX, NASDAQ
and DOW outcomes could have been substantially different.

The only thing we need now is an international crisis to detract
from market stability. OOPS! China attacking Taiwan maybe. All 
eyes are trying to avoid contact as the two Chinas trade verbal
volleys but there is an all too real possibility that this could
escalate into a real battle. You never know where the next market
bomb could appear. Last week Argentina, next week China or maybe
an inside stealth attack by Greenspan. Keep your eyes open and
your ear to the news.

This week is packed with earnings from big names. Monday we will
see IBM, MSFT, QCOM, BAC, C, DCLK, EGRP, LXK, S, TLAB, just to
name a few. Tuesday is known as super Tuesday because of all the
financial stocks that report. There will be no shortage of earnings
news and the market should move up in reaction. Failure to move
up would be another sign of things to come. Don't get me wrong,
I would love to see the market breakout of the current range and 
run for 12,000. The internals are just not pointing in that direction.
Please remember however that the longer we stay at this level the
stronger the base and more likely a breakout to the upside. This 
week will be critical.

I would be cautious this week and look for direction before making
a significant play. If the market explodes out of the gate on 
Mon/Tue and runs up significantly I would look at any major 
intraday reversal as a strong warning. Most major market changes
come on the heals of a major move in the opposite direction. I 
would be a buyer of DJX or OEX puts if you see a major spike up 
intraday and then a pull back.

We have heard a rumor that Intel is going to enter the ISP business
soon in a big way. Rumor has it that they are buying 120,000 servers 
from Dell which are being shipped in quantity to different parts of the
country. Dell announced on Friday that they are going to start
offering their Dell.net ISP service and would not be buying an
ISP. Could Dell have seen the writing on the Intel wall and are trying
to beat them to the punch? Rumor also has it that Intel is going to 
partner with a broadband company to jumpstart their ISP business. On 
Friday Cisco and Intel announced that Intel would start making high
speed DSL modems compatible with Cisco's DSL equipment. Is this another
way to get them into the prime ISP position for DSL accounts? Also in
June Intel announced that it will colaborate with Hughes Electronics
on a wide range of set top boxes that deliver Internet access to
a television. On Wednesday Intel announced that it was restructuring
several of its business groups to focus more on Internet opportunities.
Intel recently invested in World Online International, an ISP which
operates in 12 countries and has 815,000 subscribers.
Anybody see a pattern developing here? Maybe we should look at any
current pullback on Intel as a buying opportunity. Just a rumor but
the more we dig the more we uncover.....

If you did not see it on Thursday, we started an "Insider Trading"
section. This section will feature actual plays made by OIN
researchers and staff and their reasoning behind the play. We 
received many positive comments about wanting to see more real
life. You asked for it, you got it. 

We are still looking for some additional researchers who are
willing to commute by email. If you are a successful options trader
then please email us if you are interested. (kimo@OptionInvestor.com) 

Good Luck, Sell too soon.

Jim Brown

Trivia question:

As a single female which one of these would have been your best
investment in 1978?

         Bill Gates 1978

Another milestone was achieved on Friday other than records by
the various indexes. Microsoft became the first company to exceed
$500 bln in market cap. Bill Gates also became the first individual
to exceed $100 bln in net worth. Larger than the Fidelity Magellan
fund which just hit $100 bln this week. 

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.


What an ugly week. The gap down at the open on Tuesday killed
all hope of July options having a chance of retaining any value
going forward. 


Yahoo - I did not play Yahoo this week but it did drop another
-$14 before performing a perfect technical bounce from the
oversold position. (sounds like watching a gymnastic event)
The holders who watched their stock decline from $189 kept
saying to themselves, "if I had only sold at $$$$". When it
rebounded they got their second chance and as you can see by 
the chart, many took it. I am still short YHOO Aug-170 calls
@ 19.38 and they are currently $5.50. I expect them to expire
worthless for a full profit of $19.38.


MSFT - I was long Microsoft July-80 calls from last week and
after the pounding on on Tuesday morning and the drift down
all day, I was happy to sell on the bump at the Tuesday close
and exit the July position. I was short MSFT July-90 puts
@ $3.50 and I closed the position @ .13 on Wednesday for a
net profit of $3.38.


QCOM - Qualcom also gave me a scare on Tuesday morning. The
drop from $147 to $140 was a wake up call on the July-140 puts
I was short. Fortunately the rebound was almost instant so I
did not make the decision to close the position. The calls were
another matter. I did the "if only they get back to where they
were" thing and sold them Tuesday afternoon for $22.75. Sure
wish I had them back!! The high was close to $34 on Friday.
The July-140 puts were closed for $.13 on Thursday for a profit 
of $6.75 each. I still had stock @ $149 from last week and I
sold it at the open on Friday for $154.25 because I was concerned 
the market could pull back at any moment. After watching the stock
continue to rise I was of course suffering from sellers remorse
again. After the stock bounced off $153 and started back up I
checked on the July-155 puts. They were still bid @ $2.25. I 
put in a market order to sell 50 contracts and the market maker
quickly woke up. I got 30 at 1.63 and 20 at 1.50. Still about
$8000 in premiums. As soon as I saw QCOM cross $155 I sold 25
more for $1.38. I bought them all back later in the afternoon
for $.13 to close the positions. $11,340 in, -975 out = $10,365
profit on options expiring less than five hours away.


MU - Micron suffered the same bounce down on Tuesday morning
but quickly recovered. The July-45 calls I had at $4.50 quickly
reached my price target and I sold at $7.00. Yes, I could have
held them to the high of $14 on Wednesday if my crystal ball
had been working. You know my plan, take a profit when available.
Look at the chart. Did you know MU would tank on Wednesday
afternoon? It was a good play for a 65% return. I can't complain.



SFE - Safegard Scientific tanked right on the open Monday
and I got clobbered for a huge loss. I sold for $10.50 and
my cost was $14.63. OUCH!!  The chart was strong as of Friday
but somebody wanted out quick and I was in the middle.



ITVU had a real nice chart going into the close on Friday
and I was real happy about the play on Monday. The gap down
with the market on Tuesday convinced many traders with profit
from the last two weeks that maybe they should take the money
off the table. I was fortunate to get out even and only had
to pay comissions.



HSAC - High Speed Access skidded for $12 drop at the open on 
Monday and never recovered. I got stopped out at $42.00 and
actually made some money but $42 is a long way from the $49
close the day before. This was strictly a momentum play and 
the music stopped.


The big loser for the week was still MCOM. I was long the July
$40 calls from the week before for $12.50. The midday drop on
the previous Friday had caught me away from the computer without
any stop losses. Bad move! I finally sold them for $1.63 for a
$10.88 loss. 



OEX - When the market did not come screaming out of the gate
on Monday morning I quickly sold the OEX calls and closed the
position for a small loss. Cost = $14.50 sold $14.38.


VOD - Vodaphone gave us a nice bottom on Wednesday and I opened
a new position in the August-210 calls for 9.25. The dip in the
Dow just before the close on Thursday scared me out again. The
European stocks react to the Dow and if the Dow closes down they
are sure to follow and then the next U.S. trading day the U.S.
price will over react as well. You do not want to own European
stocks if the Dow closes negative. It looked like the Dow was
going balistic in the wron direction and I bailed. Shortly there
after it recovered just as fast. VOD tacked on another +$4.50
on Friday to add insult to injury. I made a small profit but
missed a large one.


Play recap:

Closed QCOM Puts  JUL-140 AAW-SH @ $.13 cost = $ 6.88 profit $6.75
Closed MSFT Puts  JUL-90  MSQ-SR @ $.13 cost = $ 3.50 profit $3.38
Closed QCOM Puts  JUL-155 AAW-SK @ $.13 avgcost$ 1.50 profit $1.38

Sold  MSFT Calls JUL-80  MSQ-GP @ $14.00 cost $12.13 + 1.87
Sold  ITVU Calls JUL-45  QYU-GI @ $ 7.00 cost $ 7.00 +  .00
Sold  MCOM Calls JUL-40  MQM-GH @ $ 1.63 cost $12.00 -10.37
Sold  SFE  Calls JUL-60  SFE-GL @ $10.50 cost $14.63 - 4.13
Sold  MU   Calls JUL-45  MU-GI  @ $ 7.00 cost $ 4.50 + 3.50
Sold  OEX  Calls JUL-710 OEZ-GB @ $14.38 cost $14.50 -  .12
Sold  VOD  Calls JUL-210 VOD-HB @ $10.50 cost $ 9.25 + 1.25
Sold  QCOM Calls Jul-130 AAW-GF @ $22.75 cost $21.00 + 1.75

Sold HSAC stock @ $ 42.00 cost $ 36.50 profit $5.50
Sold QCOM stock @ $154.25 cost $149.00 profit $5.25

Current position:

Short YHOO Calls AUG-170 YHV-HN @ $19.38 (current 5.50)

This was a rough week. I had some good plays but the bad plays
were really bad. MCOM and SFE really hammered me. The saving grace
was the PUTS which were all profitable. 

When you are trading options in the week they expire your 
options (pun) are limited. You either win big or lose big
and any unforseen market event, like the Argentina thing, 
can kill you.

Except for the naked YHOO calls I am totally in cash and
waiting for market direction. I expect a big move this week
and I want to be able to react to it either way.

Good Luck




None Scheduled


International Trade May    Forecast:  -$19   Previous: -$18.94
BTM Schroders       7/17   Forecast:  --     Previous: 0.3%
LJR Redbook         7/17   Forecast:  --     Previous: 0.1% 
API Oil Stocks      7/16   Forecast:  --     Previous: -2.59M


Housing Starts      June   Forecast: 1.675M  Previous: 1.676M
Housing Permits     June   Forecast: 1.605M  Previous: 1.586M 


Greenspan testimony before House Banking Committee

Jobless Claims      7/17   Forecast:  314k   Previous: 310K 
Money Supply (M2)   7/12   Forecast:  ---    Previous: -$17.7B


None Scheduled


Sunday, July 18, 1999 

Great Expectations!

Below is an updated list of equities (that should be reporting their 
earnings this next week) and our Pinnacle Index for those 
particular stocks. We have now also included their expected earnings, 
the infamous whisper number (if available), and their estimated 
earnings release date. What we look for are liquid stocks/options that 
garner a lot of interest from the investment community. Most of the 
issues are high tech, and are thus more aggressive. We then filter out 
many of the equities, only to show stocks with excessive optimism or 
pessimism. From a contrarian standpoint (a high number is a good 
indication of extreme optimism, and a low number is a good indication 
of extreme pessimism) you should buy when its low, and sell when its 
high. During the last two letters, we pointed out several different 
companies with extreme pessimism or optimism. During the last letter, 
we spoke about the excessive pessimism going into Gillette's earnings. 
The Pinnacle Index for Gillette was extremely low across the board, 
and as you can see by how it reacted Friday (+2.50), the negative 
sentiment was already built into the stock.   

Stock                Symbol   Pinnacle   Earnings   Whisper  Expected
                              Index      Est.       Number:  Date*:
Amazon                AMZN      5.5        -.49       -.45     7/21
America Online         AOL      2.7        +.11       +.13     7/22
American Power        APCC      2.0        +.23                7/22        
Excite@Home           ATHM      0.9        -.49       -.45     7/21
Atmel                 ATML      8.7        +.13       +.14     7/21
BellSouth              BLS      0.4        +.46       +.47     7/21
Boston Scientifix      BSX      3.9        +.26                7/20
Cadence Design         CDN      2.8        +.21                7/20
Checkpoint Software   CHKP     11.6        +.50       +.53     7/20
Citrix Systems        CTXS      4.8        +.31       +.32     7/19
Computer Associates     CA      6.3        +.39       +.41     7/20
Doubleclick           DCLK      3.5        -.13                7/19
E-Trade               EGRP      2.2        -.10       -.09     7/19
EMC                    EMC      3.9        +.24                7/21
Go2Net                GNET      3.1        +.05       +.07     7/21
Gateway Computer       GTW      4.2        +.55       +.57     7/22
Healthsouth            HRC      6.9        +.27                7/19
Hutchinson Tech.      HTCH      2.4        -.14                7/20
IBM                    IBM      4.6        +.88       +.92     7/19
Informix              IFMX      5.1        +.07       +.09     7/19
Ely Lilly              LLY      4.5        +.51                7/21
Lucent Technology       LU      2.8        +.23       +.25     7/20     
Lexmark                LXK     17.3        +.49       +.51     7/19
LSI Logic              LSI     26.1        +.18       +.21     7/21
Microsoft             MSFT      9.8        +.36       +.38     7/19
Network Associates    NETA      2.1       -1.05      -1.00     7/21
Network Solutions     NSOL      3.2        +.16       +.17     7/22
Knight/Trimark        NITE      2.8        +.35       +.38     7/21
RealNetworks          RNWK      2.5        -.01       -.01     7/20
Sprint PCS             PCS      1.8       -1.28                7/21
Qualcomm              QCOM      6.9        +.58       +.60     7/20
Schering Plough        SGP      6.9        +.36                7/20
Sun Microsystems      SUNW     12.9        +.46       +.47     7/22
Teradyne               TER      9.9        +.38                7/20
Tellabs               TLAB     16.9        +.30       +.33     7/19
Texas Instruments      TXN     23.9        +.78       +.82     7/20

If you take a look at the above, the most optimist equities include:

LSI Logic, Texas Instruments, Lexmark, Tellabs, Checkpoint Software, 
Sun Microsystems, Microsoft, and Atmel. Not only do these above 
mentioned companies have a high Pinnacle Index, but they also have a 
whisper number significantly higher than the regular earnings. Based 
upon sentiment readings and expectations, these companies would most 
likely sell off after the release of their earnings, due to the build 
up of optimism in the stock.

If you look at Texas Instruments, the Pinnacle Index is 23.9, and the 
whisper number is already 4 cents higher than the (published) expected 
earnings. TI already has so much optimism built in, that a sell off 
after earnings would be likely. For TXN to go higher, they had better 
reinvent the wheel (or a chip that will put INTC and everybody else 
out of business) because everybody already expects their quarter to 
be a blowout. This would be a perfect example of buy on rumor, sell 
on news. The same can be said about the eight stocks mentioned above. 

Low expectation stocks for this week include Bellsouth, E-Trade, 
AtHome, and Spring PCS. The options traders are pessimistic on these 
equities (which is bullish),however, three of these companies have 
whisper numbers above their expected earnings. This is a little bit 
contradictory, however, it is still bullish in general for these above 
mentioned equities. 

Ideal (low expectation) stocks would be like Gillette last week. 
Gillette's Pinnacle Index was hovering around 1, and the whisper 
numbers was 1 penny lower than the expected earnings. This was a 
perfect candidate for a rally based on low expectations. Rambus (RMBS) 
was also an ideal candidate, as it rallied over $20 in two days.




Bullish Signs:

Interest Rates:
The 30-yr Treasury is beginning to retrace back under the key 
6% level.

Investor Intelligence:  
As a contrarian indicator, the percent of Bullish investors 
decreased by over 3% and the percent of Bearish investors 
increased by 2%.

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

Mixed Signs:

Market Posture:
Several indexes are showing signs of a potential rollover, 
including the Dow, OEX, networking, software, and semiconductors.

Advance/Decline Line:
After checking up last week, the A/D line is beginning to roll 
over and could prove Bearish if decliners out pace advancers in
the week ahead. 

Peak Open Interest:  
The contraian put-call ratio clocking in at .95 suggesting bullish
sentiment picking up steam.

OTM Call Analysis

As we move through the August expiration cycle, Pinnacle is 
tracking the level of call buying (OTM) between 710-780 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 19           35,225        -
Friday, June 25           63,342        +79.8%
Friday, July 02           87,833       +149.3%
Friday, July 09           99,855       +283.5%

August Expiration Cycle
OEX OTM Call Analysis (Open Interest August 710-780)
Date                 Open Interest     Change %

Friday, July 16           32,285        -

Market Sentiment at a Glance     Friday
Indicator                        (7/16)

Pinnacle Index (OEX):          

Overhead Resistance (720-750)      3.6
Underlying Support  (685-710)      1.7       

Put/Call Ratios:

CBOE Total P/C Ratio                .6
CBOE Equity P/C Ratio               .5
OEX P/C Ratio                      1.3

Peak Open Interest (OEX):

Puts                              600        
Calls                             730        
P/C Ratio                          .95

Market Volatility Index (VIX):	

CBOE VIX                          18.13

Investors Intelligence:

Bullish                         55.20%  *
Bearish                         26.70%  *

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                        (7/09)

Overhead Resistance (720-750)    3.6         

OEX Close                      733.79
Underlying Support  (685-710)    1.7 

Average ratings: 
Resistance levels 2.0 / Support Levels .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is building at the OEX 725/750 level 
while the underlying support is holding at the OEX 685/710 level.

Put/Call Ratio                  Friday
Strike/Contracts                (7/16)

CBOE Total P/C Ratio             .60
CBOE Equity P/C Ratio            .45
OEX P/C Ratio                   1.26

Peak Open Interest   Friday
Strike/Contracts     (7/16)

Puts                 600 / 12,196     
Calls                730 / 12,844     
Put/Call Ratio        .95             



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 

July 16, 1999                           18.13  *



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

July 14, 1999                         55.2        26.7 *


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              7-18-99
Sunday                   2  of  7


As of Market Close - Friday, July 16, 1999 

                   Key Benchmarks
Broad Market       Bearish/Bullish  Last    Posture/Since 

DOW Industrials   10,500  11,000  11,210    BULLISH   7.01
SPX S&P 500        1,315   1,355   1,419    BULLISH   7.01
OEX S&P 100          660     690     734    BULLISH   6.29
RUT Russell 2000     390     450     465    BULLISH   6.29

NDX NASD 100       2,110   2,220   2,459    BULLISH   6.29
MSH High Tech      1,010   1,080   1,244    BULLISH   6.19

XCI Hardware         900     950   1,081    BULLISH   6.17
CWX Software         675     700     840    BULLSIH   6.17
SOX Semiconductor    410     425     530    BULLISH   6.10
NWX Networking       525     545     624    BULLISH   6.25
INX Internet         500     510     520    BULLISH   7.01

BIX Banking          680     720     707    Neutral   6.29
XBD Brokerage        410     425     429    BULLISH   7.01
IUX Insurance        645     660     659    Neutral   6.29

RLX Retail           900     910     954    BULLISH   6.29
DRG Drug             370     400     375    Neutral   7.01
HCX Healthcare       750     800     776    Neutral   7.01
XAL Airline          180     190     165    BEARISH   5.21
OIX Oil & Gas        285     310     311    Neutral   5.13

Posture Alert
The market continues on course with more all time highs being 
added this last week. The 30-yr bond continues to hold below 
6%, and corporate earnings continue to come in positive. The 
leaders for Friday include Software (+2.25%), Insurance (+1.67%), 
and Hardware (+1.31%).  No changes to the posture board.

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



On behalf of OptionInvestor and George Fontanills of OPTIONETICS 
we are declaring the OIN summer seminar series as SOLD-OUT.

For all you folks that have already attended the Boston and Los 
Angeles events thank you for your support and for the lucky people 
who signed up for the Dallas and San Francisco seminars ..."enjoy". 

Don't forget you can still take the "OptionInvestor Home Study 
Course" .. featuring George Fontanills and his OPTIONETICS 
methodology demonstrating high profit low risk and low stress 
option trading. The home study package comes in either audio or 
video format and allows a future attendance at a OIN/Optionetics 
seminar for FREE. So you get the best of both worlds. Study in 
the comfort of your own home and then attend a seminar in the 
Fall for FREE. If you sign up now you can also reserve a place 
for a companion in the seminar for FREE. As you now know space 
is limited and you should sign up today to avoid being disappointed 
for the live seminar."

email dana@OptionInvestor.com for details.


The stock market is that creation of man that 
	humbles him the most. - Anonymous

Second to that is writing about one's trades in front of 
his public.  Actually, this month has been very good for me.
Yet, it is one of those few times of the year that our mantra
"sell too soon" can bring about a bad case of seller's remorse.
Nevertheless, I'd rather get out of a trade with a profit and
whine about missing the rest than have the trade go against
me with no profit or worse - a loss.  

While I did not have the luxury to go into the same depth that
Buzz did on Thursday, I still hope you can garner some 
enjoyment from my own recent plays.

To bring you up to speed, I'm going to list all my trades
for the month of July.  During earnings season, I would 
prefer to trade a lot more, but work here at OIN has been
fast and furious.

Actually, let me jump back to June 28th, 1999.  After doing the 
research on the play for UNPH over the weekend, I had made 
a mental note to watch it over the next week.  Monday the
28th, UNPH had gapped up a couple of points (to the low
150s...I don't remember really $152 or $153) and held it all
day.  I chose to jump in with some July 145 calls about 1:00pm
because I believed that UNPH really was due for a split and 
it had just come off its 10 dma.  I would have felt better if
I had played it off its 30 dma or even its 50 dma but it was
earnings season and everything looked bullish.  Anyway, I spent
$13.50 for the options.


The next day, UNPH took off.  Because I had been expecting 
to hold this play for a couple of weeks, it was one of the
few times that I did not already have a GTC sell already in.
To have UNPH flirting with +8 all near the end of the day was
too much for me.  The greed factor immediately kicked in as
the option price had already surpassed my planned exit of
$17.  I tried all afternoon to sell for $19.50 but settled
on $18.50 with 15 minutes to the close.  I got taken out and
a last minute buying spree had my option close at $19.50.

So for $5 an option in one day did I complain?  No, but watching
UNPH go up to over $173 in the next two days from the $160 
level I sold at was tough.  Even worse, when UNPH merged
with JDS Fitel the company later announced a stock split like
we expected and the stock price went to $177+.

That's okay, I'll take $5 on an option any day.

Next on my horizon was VOD.  VOD makes some pretty good moves
and Thursday July 1st, it made a very clear bounce off its 
50 dma at $195.  It tends to channel so I knew it could run
for a good three or four days if the market let it.  The next
day, Friday, July 2nd, VOD had gapped up and then sold off
midday only to come back strong near the end of the day.  This
was a Friday ahead of a holiday weekend!  So with VOD nearing
$202 and climbing I spent $9.13 on some July 200 calls.  

I was feeling pretty confident about these since VOD really 
had no resistance until about $212-$215.  The next trading 
day was Tuesday, July 6th.  VOD gapped up and made a long 
slow climb all day but started gaining momentum near the end
of the day to close at just under $206.  Late in the afternoon, 
I entered a GTC sell for $15 (getting a little carried away in 
my excitement) and eagerly waited for tomorrow.  Sure enough,
VOD gapped up again to $209 and proceeded to bump up against
$211 all day.  This time I had no qualms about getting out
and changed my sell to take me out at $12.25.  Of course 
the next day VOD immediately ran up to over $213 before selling
off the rest of the day.


That same day, the Dow (DJIA) had run up to its current 52 week
high over 11,230 and then fell all the way back down to under
11,150 by 3:20 pm.  I thought this really didn't bode well for
the next day and gambled on some OEX puts and bought some ATM
July 720s for $10.25.  The next morning, the market opened and
headed down as expected but since I was trading OEX options I 
was cautious and watched the market bounce off of 11,100 3 or 4
times within the first hour of trading.  I could have gotten out
for a 10% profit more than once but the market rallied and 
when the Dow turned positive I bailed and sold my puts for a
small loss $9.38.  Yes, if I had a little more faith I could have
turned a larger profit when the market turned South in the middle 
of the day but it almost immediately rebounded and we've been 
stuck in a trading range ever since.

So now it is the 7th of July (same day I sold my OEX puts above).
The market held and started to rally at the close.  I had been 
watching several stocks and chose MSFT, SNE, and VISX.

MSFT had just had a bad day on Monday the 6th, but made a clear
bounce off its 10 dma and had been in rally mode all day.  With
earnings two weeks away I felt it was a safe bet to buy some calls.
With MSFT at $92 I placed my order.  MSFT is one of the few stocks
with enough liquidity that I feel really comfortable placing a 
market order to buy something.  I got filled at $3.50 for July 90s
right about 3:54 pm.  

SNE had also just bounced above its 10 dma (at $110) but it had 
done so intraday on the 7th.  This was more of a momentum play.
The Japan market was doing well, electronics were doing well,
and SNE had been showing a lot of strength.  Volume on this stock
is lower than I'm normally comfortable with most of the clues
looked good.  With SNE at $111 I bought some July 110s at $3.

Now I had about 2 minutes left and but I was still in "buying" mode
and was looking for something else before the market closed.
I had been watching VISX for a while and had been following the 
news, reading the play.  I knew that earnings were soon and 
the expectations for VISX were going to be high.  This was 
always a fast mover tended to be volatile.  VISX had just had
a very strong day on the 6th, but today had corrected and bounced
off an intraday bottom.  I thought, "Great! there is another 
entry point."  VISX was at $88 and the bid was at about $2.25 by
$2.38 for some July $95 calls.  I placed my order for $2.25 right
at the closed and got filled at 4:02 pm.

So what happened next?  Well, the next day, VISX ran straight up
all day long and by the close was at about +$5 near $93.  
My options I had bought for $2.25 were now $3.38.  That is a great
return for one day.  However, earnings were still a week away on
the 14th.  The greed factor raised its ugly head and I held.
The next day, VISX gapped up at the open near $94.50, ran to $95 
and promptly headed South.  My options peaked just under $4 and
quickly fell away.  For the next three trading days VISX could
not break $92 and my options started to bleed to death.  Next 
thing I knew it was the 14th and I had to decide - hold over
earnings or not.  Through all the temptation and glory I saw
VISX delivering in my head one thought rang in my ears.
"Never hold over earnings".  I had deliberated so long it was now
2 minutes to close and frantically placed my market order to 
get out.  I was filled at $1.50 while VISX closed at $92  The 
next day VISX ran to $96.  Oh well, it was a gamble either way
but I elected to presever what was left of my capital.


SNE was a different story.  My options that I had bought for
$3, were doing fine. SNE was steadily climbing.  I knew that
SNE tended to gap one way or the other at the open so I had 
a GTC sell order for $6 immediately following my confirmation 
order to buy them.  Sure enough, three days later SNE 
gapped open a couple of points to $117.50 and my sell order
at $6 was filled at $7.25.  I was overjoyed.  The play had
behaved better than expected.  However, to make my joy complete
I have watched SNE continue to run from $117.25 to $125.56.
Again, I can't and won't complain, but that just hurts.


My last trade was MSFT.  MSFT has a huge following so I won't 
go into too much detail.  With the Nasdaq hitting new highs,
tech stocks were in vogue, the software giant was clear for
takeoff.  The only problem was the constant stall at $95.
Fortunately, I had bought $90 calls, but the problem was I 
had bought July.  I saw no reason to pay for August if I was
going to be out of them before earnings on Monday, July 19th.
Surely, MSFT would have enjoyed most of its earnings run
by then.  By Wednesday I was getting frustrated and when I saw
MSFT run right up to $95 and stop I felt enough was enough 
and sold my options for $4.63.  A great return - but I knew
MSFT had more juice in it than that.  Sure enough, everyone
knows what happened on Friday.  My options had actually hit
$10 before the close on Friday.  


Of course as an options trader with no intention of excercising 
those calls, why would I hold Julys through the afternoon of 
expiration Friday?  I would not.
So I chalk another one up to the big one that got away.  In 
reality I don't see it that way so the MSFT play didn't hurt
as much as the SNE one did.  Of course, with plays like that
I plan on living in pain for the rest of my life.

Sell too soon,



Another Great Week for the Local Trading Clubs in Your Area

We had our third meeting on Sunday our topics were how options 
are priced and a continuation of written trading plans. One of 
our members, Jim, gave a great presentation on his trading plan 
he uses for day trading and a presentation on option pricing. 
We had a great story from Bev, about the consequences of failing 
to follow through with her plan, I think we have all been there, 
and a discussion of how to improve that scenario. Our next meeting 
will be on strategies, and how to put them into a trading plan, 
and also on the pricing of LEAPS. We have a very enthusiastic 
group with a desire to learn and share. We had 16 in attendance 
on a very beautiful Seattle Sunday afternoon and 28 on our last 
cloudy Seattle afternoon. Please have any inquiries include their 
e-mail address, it's much easier to just pop them into the group 
address book if they just type it out in their email. 
Thanks. Leslie Jouflas Seattle Club


Of course I would like to tell you some interesting stories, etc. 
But we've only met once so far as it took us awhile to come together. 
However it was one of the more important meetings I can remember as 
far as the relationships that have sprung up from it and the new 
sources of information I have gotten. Attendees come from Trenton, 
Millville and Cherry Hill, New Jersey as well as one attendee from 
Philadelphia, PA. I will be better off giving you some stories as 
we go along.

Jim johndoe@jersey.net


We have over 30 people coming from every direction in New England. 
Gary Winter will speak, from Tucker Anthony in downtown Boston. He's 
traded options for over 20 years and will start with the basics for 
the novices in the group. Then he'll build up from there and take all 
levels of questions at the end.

The Chicago Board of Options is going to send someone out to talk to 
us in the next month or two, and several other people have accepted 
our invitation to speak as well, notably Jerry Kopf from Benjamin and 
Jerold, and Leeway from the Option Investor Message Boards.
We're very flattered that they all have agreed to come visit us!
We look forward to coordinating our September meeting with the Option 
Industry Council's workshops on Sept. 15 and 16, on Basics and then 
Advanced Level Options.

We currently have close to 50 members, most of them quite active. Many 
of us email each other every day and exchange humorous stories and 
trading ideas. It's so much fun and much better than operating alone!
Thanks for giving us our start!
Kim Lemaire
Contact Support New England

We have had 3 meetings in Chapel Hill, NC. 9-13 people in attendance 
with experience ranging from pure novice to one day trader who also 
writes programming for Omega Research. Good group, lively conversation 
and interaction. We now have 16 on the roster and growing! 
tyrebitr@mindspring.com North Carolina


Interested? Please send an email of interest to:
Visit@OptionInvestor.com or Organize@OptionInvestor.com 


Index       Last   Week
Dow      11209.84  16.14
Nasdaq    2864.48  71.41
$OEX       733.79  10.91
$SPX      1418.78  15.50
$RUT       465.26  10.51
$TRAN     3401.87 -25.45
$VIX        18.13  -0.96

Calls              Week

SNE        125.56  11.19  Japanese economy is recovering
TXN        154.19  10.94  Announced 2:1 split last week
QCOM       158.25   9.51  Dropped, Earnings are Monday
VRIO        82.38   7.62  Investor excitement is evident
HWP        114.00   7.31  Possible split announcement??
VOD        214.25   7.12  Annual shareholder meeting July 21
LU          78.44   6.50  Earnings coming on July 22nd
SEPR        92.94   5.69  Let the earnings run begin
AMAT        78.56   4.44  New, strong sector momentum
CMVT        81.38   4.25  New, buy ratings and price targets
EL          56.00   4.19  New, only 7 days to earnings
HD          69.63   3.81  New, popular analysts pushing HD
NOK         98.13   3.70  Earnings Thursday before the bell
SUNW        76.13   3.19  Releasing earnings on Thursday
UIS         45.88   3.13  New, surprisingly strong earnings
NXLK        95.94   2.94  2:1 stock split coming in August
GTW         70.50   2.88  Breakout play in a hot sector
GE         118.88   1.75  New, all-time high set Friday
EXDS       138.00   1.63  Big swings are great for options
DELL        43.25   0.44  Still a leader in computers
BBY         75.69  -0.30  Sitting right on the 10-dma
TMCS        34.00  -0.87  Dropped, flattening out
SLR         71.06  -0.88  Consolidating, use stops
CSCO        66.00  -1.07  Not to late to get aboard
IBM        136.25  -1.13  Dropped, Earnings are Monday
DCLK       100.13  -2.81  Dropped, Earnings are Monday
BRCM       139.81  -3.94  Dropped, Underperforming
RNWK        86.63  -5.75  Dropped, Earnings are Tuesday
AOL        119.89  -8.37  Dropped, Big disappointment


NDB         48.44  -5.75  New, online brokers looking weak
U           40.19  -4.81  New, old and new problems surfacing
DE          35.69  -2.50  New, commodity prices hurting sales
WPI         34.06  -1.88  Showing all the signs of weakness
FDX         47.44  -1.06  Oil prices at 18-month high
JCP         46.50   1.07  Can management turn things around?


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.



GE   - General Electric Co.
CMVT - Comverse Tech Inc.
EL   - Estee Lauder Companies Inc. 
HD   - Home Depot Inc.
AMAT - Applied Materials
UIS  - Unisys Corp.


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

DE   - Deere & Co.
NDB  - National Discount Broker Group Inc.
U    - US Airways Group Inc.


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.


TMCS $34.00 (-.88) TMCS is another Internet stock that
has just flat ran out of gas.  As the NASDAQ makes new highs,
Internets are losing ground.  We are a little cautious for 
this sector and can't feel confident in recommending TMCS 
for the time being.  If we see confirmation of a new move
up in the Internet sector we will look to add TMCS at that
time.  We just aren't seeing the earnings runs we thought
we would out of the sector. 

DCLK $100.13 (-2.81) Our play of DCLK is ending due to the 
fact they have earnings during the first part of the week.  
Overall we were disappointed by the performance of both DCLK 
and the Internet sector this week.  DCLK did provide lots of 
volatility and opportunities to profit but compared to the 
NASDAQ it under-performed.  We talked about the resistance 
from the moving averages at $101 and DCLK just couldn't get 
enough strength to push above that price. If this was the 
best they could do in an earnings run, I wouldn't expect much 
after the report unless they really blow away the estimate or 
announce a split.  The company is scheduled to report earnings 
on Monday, July 19th. 

AOL $120.00 (-8.25) AOL has been a big disappointment 
to all of us involved with the play.  We added it to catch 
another one of their famous earning runs which have proved 
so profitable in the past.  It has given us a glimpse of 
of strength and momentum over the past two weeks but then 
retreats again.  It is our feeling that Thursday's news of 
selling by institutions like Fidelity is on going and will 
probably keep the stock down over the near-term.  In our 
most recent update we mentioned the critical $120 support 
which it violated most of the day Friday and that gave us 
the final evidence we need to drop it as a call play.  If 
you have an open position, remember that we don't encourage 
holding over earnings which are on Wednesday.  
RNWK  $86.23 (-6.15) RNWK has been a real disappointment. It 
will announce its earnings on Tuesday, July 20th. The stock was 
cheated out of its earnings run by weakness in the Internet 
sector. Following new product announcements and a deal with 
Microsoft, RNWK had made huge gains the week ending July 2nd, 
and smaller gains the following week. Going into last week it 
was gaining strength as it headed into what should have been 
a good earnings run. Unfortunately, the Disney-Infoseek deal 
caused a reassessment of valuations in the Internet sector, 
and many Internet related stocks that had made recent gains 
saw profit taking. RNWK could still see a pop tomorrow. If it 
doesn't, and if earnings beat estimates, it could climb after 
it announces earnings. This is NOT a recommendation to hold 
over earnings, but a suggestion to watch a stock that could 
have potential on the other side of earnings. We are dropping 

IBM $136.38 (-1.00)  We are dropping IBM, since it reports 
earnings tomorrow, and we never recommend holding over earnings. 
Although it lost $1.00 last week, this successful play is up 
over $21.00 since we picked it up, and it might rise further on 
Monday. A recent article says Abby Joseph Cohen feels that IBM 
is one of the stocks that will drive the DJIA higher. She says 
mainline tech companies are reasonably priced and that, of the 
Internet stocks, it is the Internet "infrastructure-building 
companies" like IBM that will do well. This sentiment was echoed 
in a CNET article on Friday. It says that Merrill Lynch (MER) 
believes that revenue growth at Big Blue "could approach last 
quarter's 15% vs. a 12% estimate." Solomon Smith Barney and 
other analysts also had positive things to say about IBM, 
particularly concerning IBM's emphasis on e-business and its new 
Technology Group. The just-before-earnings media coverage may 
give the stock a boost on Monday. It announces after the closing 
bell and could be a play for options day-traders.


The Option Investor Newsletter          7-18-99
Sunday             Part 3 of 7


BRCM  $138.50 (-5.25)  BRCM has given up most of the gains it 
saw last week, and we are dropping it due to poor performance. 
This stock often trades with the Internets, and the Internets 
as a group did not perform well last week. There are those of 
us, however, who believe that BRCM may still make a good 
showing early this week before its earnings report after the 
close on July 21st. Take a look at the reception of 2 broadband 
IPOs in a similar business. Efficient Networks (EFNT) was 
offered Thursday at $15 and closed Friday at $58.69. Paradyne 
Networks (PDYN--originally spun off from AT&T and then Lucent) 
was offered Friday at $17 and closed at $56.26. Some of the 
short-term trading capital that flowed into these IPOs may move 
back into stocks like BRCM as investors take profits and look 
for a short earnings play on BRCM. Other investors may look 
for a sympathy move from BRCM. Unfortunately, BRCM did not live 
up to our expectations last week, and we must drop it. 

QCOM $158.25 (+9.50)  It's been a great run.  But since earnings 
are due after the close on Monday, we are dropping the play on 
principle of never holding over earnings.  Generally, when 
expectations are high (as they are with QCOM) the price falls 
after the announcement.  Also, QCOM will likely announce a 2:1 
split when they announce what promises to be better than expected 
earnings.  The outcome should be excellent, but we have to stick 
to the rules.


none today


EXDS - Exodus Communications 
NOK  - Nokia
HD   - Home Depot Inc.
SUNW - SunMicro
VOD  - Vodaphone Airtouch (4:1 possible)
HWP  - Hewlett-Packard



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  

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
CREE - Cree Research   2:1 07-30-99 ex-date 08-02
QLGC - QLogic Corp     2:1 07-30-99 ex-date 08-02
JDSU - JDSUniphase     2:1 08-03-99 ex-date 08-04
TD   - Toronto Dominion2:1 08-03-99 ex-date 08-04
JMED - Jones Pharma    3:2 08-06-99 ex-date 08-09
LVCI - Laser Vision    2:1 08-09-99 ex-date 08-10
ENE  - Enron           2:1 08-13-99 ex-date 08-16
XETA - Xeta Corp       2:1 08-13-99 ex-date 08-16
ADVS - Advent Software 3:2 08-16-99 ex-date 08-17
TXN  - Texas Instrument2:1 08-16-99 ex-date 08-17
NXLK - Nextlink Comm   2:1 08-27-99 ex-date 08-30

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

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

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

GE - General Electric $118.88 (+1.75)
Bringing good things to life

See details in sector list

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


SUNW - Sun Microsystems $76.13 (+3.19)(+2.88)(+5.19)(+0.81)(+4.38)
Textbook earnings run

See details in sector list

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


Put play of the day:

NDB -  National Discount Brokers $48.44 (-5.75)
Online brokers in a downtrend

See details in sector list

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


DELL - Dell Computer $43.25 (+0.44)(+5.68)(+0.19)

The one, the only, the amazing. . . Dell!  Dell is the 
direct sales model leader and pioneer of the on-line retail 
business.  They sell PC's notebooks, servers and work 
stations built to order direct from their factories 
worldwide.  Eager buyers pony-up 18 million e-$$$ daily for 
their products.  Total annual sales for the trailing 12 
months were $18.2 bln., excluding their recent foray into 
direct selling of other manufacturers' software and support 
products from their gigabuys.com web site.  For 1999, Dell 
expects total revenues of $26 bln.  For perspective, that 
greater than Microsoft's anticipated 1999 revenue.  Despite 
their recent fall from grace, they are growing at an annual 
rate of 41% with margins that are the envy of the industry.  
Return on equity is a whopping 79%.

Like a phoenix on the desert, Dell has kept on performing no 
matter how many feathers the analysts try to pluck from it.  
Investors were concerned that that the sub-$1000 category was 
going to eat Dell alive.  Not so.  As early as June 9, 
International Data Corporation announced that they expected 
worldwide PC shipments to grow by over 21% this year instead of 
the previously forecast 16.5%.  Then analysts squealed about the 
falling ASP's, or average selling prices.  That Dell's least 
expensive model is $899 compared to competitors in the $300-$500 
range doesn't hold water since over 90% of Dell's customers are 
businesses.  A comment from Michael Dell stating "the company 
earned 55 percent of the PC industry's total profit in the first 
quarter and that its profit share may increase in the second 
quarter" points to the direction of the future.  Not many noticed 
that either.  

Technically, the chart still looks pretty good.  Dell reached as 
high as $44.63 last week, but couldn't hold it.  In fact in 
Friday's trading it fell further and closed only $0.13 up from 
its low of the day.  Volume was only %65 of normal.  However, we 
are still waiting for a more of a pullback before entering a 
position.  Based on Thursday and Friday's trading, there appears 
to be some short-term support in the $42 to $43 range.  But 
exercise caution here, as NASDAQ has set records for the last 3 
days and is due for some cooling off.  DELL will move with it.  
Again, this is a time for DISCIPLINE AND PATIENCE.  Like CSCO, 
Dell's earnings are not until late in August (8/18, company 
confirmed), so you won't be missing an earnings run.  Plan your 
entry in accordance with your own risk tolerance.

Dell held their shareholders meeting On Friday, wherein Michael 
Dell predicted that 1 of the current top 5 computer makers would 
be forced out of business, according to a Reuter's report.  
That's a bold reference, even for Michael Dell.  In the same 
report, Dell further commented, "There are NOT (emphasis, ours), 
we believe, dramatic, fundamental changes going on in the 
industry.  Prices have declined at fairly predictable levels 
similar to trends in other industries, and in this kind of 
environment the superior business model thrives and those without 
it flounder."  On a chart, Dell showed Compaq's cost structure as
"about double" that of Dell's.  Can you guess which of the 5 
might have been referring to?  Sure, we knew you could.  But that 
doesn't mean load up the truck on DELL, or short CPQ.  That's a 
long-term trend and not conducive to options trading.  In other 
news from the shareholders' meeting, DELL also announced that it 
would not likely buy an ISP, including Mindspring (they don't 
want to pay the inflated multiple).  Instead they will likely 
build up their own ISP, dell.net, which is popular in Europe.

No options listed yet.  Be patient

Picked on July 11 at $(not yet!)    PE = 70
Change since picked        +0.00    52 week low =$20.38
Analysts Ratings     10-9-12-0-0    52 week high=$55.00
Last earnings     05/99 est 0.16    actual 0.16 
Next earnings     08-18 est 0.17    versus 0.13
Average daily volume = 26.13 mln. 
Chart = http://quote.yahoo.com/q?s=DELL&d=3m

GTW - Gateway $70.56 (+2.93)

Gateway is #2 in the direct marketing of PCs in the U.S.
Second only to Dell, Gateway is unique in their marketing
approach.  Computer users may order by phone, or on the Web. 
GTW makes desktop, portable PC's, PCTV's, and servers.

Overall GTW had a pretty good week.  Thursday Gateway made
an intraday high of $75.75, which is over an $8.00 move for 
the week, and over $7.00 since we added it on Tuesday.
With the exception of the previous quarter Gateway has moved
about $15-$20 higher over the three week period prior to
earnings.  July 1st, the low of the day was $56.75.  By our
calculations that's about $19.00.  We are not giving up on 
GTW.  So look for the $70.00 area to provide mild support with
stronger support at the $67 level.  Volume has been below average 
the last two sessions.  We would like to see GTW resume its 
upward movement along with better than average volume.  However, 
a close below support at $67 in front of earnings this week 
would signal some weakness in the stock.  Actually, traders
should be concerned if GTW closes below $70 any time this week.  
We would be cautious at this time about entering any new plays 
on Gateway with earnings so close.  You'll have to be quick.  
This week earnings season really kicks into high gear.  GTW is 
scheduled to announce on Thursday.  Be sure to play with 
stop losses to protect yourself from the trade going against

There is really nothing in the news to report on Gateway.
Everyone that's not on "FED WATCH", is waiting patiently
for earnings to come out.  With PC prices falling like a rock,
those involved in the PC industry are trying to figure out how
to give away computers and sign customers up for their Internet service.

BUY CALL AUG-65*GTW-HM OI=1293 at $8.25 SL=$7.00 ITM $5
BUY CALL AUG-70 GTW-HN OI=1388 at $5.38 SL=$4.50
BUY CALL AUG-75 GTW-H0 OI= 858 at $3.13 SL=$2.50
BUY CALL SEP-70 GTW-IN OI=1794 at $7.13 SL=$6.00

Picked on July 13th at  $68.31   PE = 30
Change since picked    +$ 2.25   52 week high=$84.50 
Analysts' ratings    7-8-6-1-0   52 week low =$36.13
Last earnings   3/99 est  0.60   actual 0.62 surprise=+3%
Next earnings   7/22 est  0.55   versus 0.38 
Average daily volume  1.35 mln.
Chart = http://quote.yahoo.com/q?s=gtw&d=3m

HWP -  Hewlett Packard $114.00 (+7.31)(+4.94)(+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 lead the Silicon Valley stocks this week demonstrating 
its strength and ability to climb even higher.  The stock 
packed on the power making over $7 in gains and setting new 
highs along the way.  The latest record was reached on 
Friday at $114.56.  For the most part, volume has been 
moderate or only slightly above normal.  Its 10 dma is 
below the current price down around $107.  The upward trend 
originally started at the beginning of July as HWP charged 
forward with its sector.  It has not looked back.  The 
anticipation of a possible split announcement around its 
earnings date (August 16th) is growing.  The stock last 
split 2:1 in July of 1996 when it was at $80-85.  The price 
level is obviously way above that now!   

Lots of HWP news this week.  On Monday, a big contract was 
awarded to Hewlett-Packard.  They announced a 3-year, $100 
mln. deal with Rockwell, a world leader in electronic 
controls and communications.  Rockwell is primarily buying 
higher-end Vectra desktops ($1000-1700 each) from HP.  
Considering the sluggish PC market, this is a very welcome 
pact.  Also, CSFB announced they raised their 1999 fiscal 
numbers for HWP to $3.55 from 3.45 and but kept their "buy" 
rating.  On Wednesday, Merrill Lynch analyst, Steve 
Milunovich, raised his target price to $122 from $100.  He 
believes HWP is "hitting new highs thanks to the upturn in 
H-P's business and the rising tide carrying Internet 
infrastructure vendors."   Hewlett Packard was also given 
highest honors in the 'Channel Champions' survey conducted 
by Computer Reseller News.  This is the 6th consecutive 
year HWP has had the highest reseller's satisfaction rating 
in both scanner and laser-printer categories.  Then on 
Friday, developing leading-edge technology between HP and 
the University of California at Los Angeles hit the 
newsrooms.  They announced they have developed a chemical 
process to create an integrated circuit that produces a 
computer speed 100 bln. times faster than that now exists.
Presently light beams are used to etch the silicon wafers 
and size is limited by the light's wavelength.  

BUY CALL AUG-110*HWP-HB OI=1317 at $ 8.13 SL=6.25 ITM $4
BUY CALL AUG-115 HWP-HC OI= 163 at $ 5.63 SL=4.00
BUY CALL AUG-120 HWP-HD OI=1215 at $ 3.38 SL=1.75
BUY CALL NOV-115 HWP-KC OI=  39 at $11.13 SL=9.00
BUY CALL NOV-120 HWP-KD OI= 599 at $ 8.75 SL=6.75

Picked on July 1st at $102.00    PE = 36
Change since picked    +12.00    52 week high=$114.56
Analysts Ratings   6-10-9-0-0    52 week low =$ 47.06
Last earnings 04/99  est= .80    actual= .88  surprise=10%
Next earnings 08-16  est= .79    versus= .58
Average daily volume = 3.28 mln.
Chart = http://quote.yahoo.com/q?s=HWP&d=3m


SUNW - Sun Microsystems $76.13 (+3.19)(+2.88)(+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."
Just like clockwork SUNW bounced off of support at its 10-dma 
and powered ahead to close up for the 5th week in a row.  In 
fact SUNW hit its 52-week high on Friday before closing just 
underneath it.  Is this a text book earnings run or what?  The 
stock should continue to rise until Thursday when earnings are 
released as investors are anticipating a possible split.  The 
NASDAQ also looks strong ahead of a week where we will see 
lots of earnings reports.  There is no clearly defined price 
which you could call resistance since we are at a new high but 
be cautious of the overall market sentiment.  We could see 
increased selling after all the earning reports are released.  
We, of course, will not be holding over earnings so you may 
want to plan your exit strategy ahead of time.  That means 
any new plays this week will have to be quick ones.  Use 
caution since we are nearing the end and remember to sell too 

The interesting news of the week came on Thursday when Sun 
formally named its project StoreX platform.  They will call 
it Jiro. The Jiro open management platform is designed to work 
with Java and Jini technology to enable the deployment of 
flexible applications that allow the management of disparate, 
networked storage devices, applications and services.  It 
should be available in its earliest form in August.

BUY CALL AUG-70*SUQ-HN OI=4289 at $8.50 SL=6.50 ITM $6
BUY CALL AUG-75 SUQ-HO OI=5790 at $5.38 SL=3.75
BUY CALL AUG-80 SUQ-HP OI=2972 at $3.25 SL=1.75
BUY CALL OCT-75 SUQ-JO OI=2059 at $8.75 SL=6.50

Picked on June 20th at   $64.06    P/E = 55
Change since picked      +12.06    52-week high=$76.44
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


UIS - Unisys Corp. $45.88 (+3.13)

Computer based information systems and related services is the
main focus for Unisys.  They integrate hardware and software
for financial and other niche market customers.  Some of their
main customers include Bell South, Eli Lilly and the US government.

UIS released earnings Thursday.  Earnings rose to $0.38 per share
from $0.24 in the second quarter of 1998 (estimates for Thursday
had been $0.33). Revenues grew 9% to 1.9 bln from 1.7 bln a year 
ago.  All in all UIS beat the street by over 15%.  Friday, 
Wallstreet rewarded UIS with a show of support adding $1.44 per 
share on strong volume of just under 2.3 mln. shares.  It made a 
new 52 week high of $46.13, closing near its high of the day at 
$45.88. Normally we will hold off and let the impact of earnings 
run its course, before introducing a new play.  However the impact 
in this case seems to have propelled UIS into new territory.  The 
Technology Sector, specifically the computer services industry 
has been gaining strength recently and we feel that UIS is on 
its way to making further gains.  It was in a narrow $3 range 
for most of the month of June.  On July 1st UIS, broke through 
the $40 level of resistance and has been gradually moving up the 
last two weeks.  A glut of earnings continue to come out this week,
which could help to propel UIS higher.  Support is at $45.00.  
Look for positive direction confirmed by solid volume before 
starting a play on UIS.  AS always assess your risk profile and 
set your stops.

Not much other news on UIS at this time other than its
earnings news released this week.

BUY CALL AUG-40*UIS-HH OI= 660 at $6.63 SL=$5.25 ITM $5.88
BUY CALL AUG-45 UIS-HI OI=1068 at $3.00 SL=$1.75
BUY CALL OCT-40 UIS-JH OI=1274 at $7.63 SL=$5.75
BUY CALL OCT-45 UIS-JI OI= 334 at $4.50 SL=$2.75

Picked on July 17that   $45.88   PE = 32
Change since picked     + 0.00   52 week high=$46.13
Analysts' ratings    8-2-3-0-0   52 week low =$17.63
Last earnings   7/15 est  0.33   actual 0.38 surprise=+15%
Next earnings  10/15 est  0.34   versus 0.26
Average daily volume  1.58 mln.
Chart = http://quote.yahoo.com/q?s=uis&d=3m


EXDS - Exodus Communications $138.00 (+1.62)(+17.63)

Exodus Communications strives to be a perfect host (the Web type, 
that is).  EXDS offers server hosting and Internet connectivity, 
among other services, which let businesses outsource management 
of their Internet sites.  Exodus has thirteen Internet Data 
Centers (8 more planned by year-end) where clients store their 
servers in secure vaults.  Often, these are called "server 
farms".  In addition to providing storage space, the company 
furnishes connections and maintenance of its clients' networks.    
Its client list includes CBS Sports, eBay, and MSN Hotmail and is 
growing at an average rate of 2 major customers per day.  Exodus 
is expanding its geographic penetration.  Their growth comes from 
acquisitions and development of new server farms or data centers. 

Earnings are scheduled Wednesday, July 21 after the close 
(company confirmed).  This is one volatile play.  You've probably 
noticed the $10 daily swings that have made it difficult to take 
a position.  During the week, EXDS had a trading range of $132 to 
$148.  Until 2 hours before the close on Friday, EXDS had climbed 
to $146.  Then a 2 hour selling wave ensued sending it down $8 to 
close at $138.  Frankly, that's a lousy sign, and we can find no 
news explaining the reason.  Until then, support was $140.  
Perhaps it was option expiration-induced selling and may recover 
on Monday.  Watch to see if gets solidly back over $140 within 
the first 2 hours of trading on Monday.  If there is a bounce 
back with volume, that's ideal.  A gap open on low or average 
volume is much less convincing.  With only 35 mln. shares in 
float and average volume of over 2 mln. shares per day, EXDS is 
fast mover in both directions.  Don't leave your screen to play 
this one and use stops to protect yourself.  VOLATILITY = HIGH 

We also need to put EXDS officially on our split candidate list. 
They last announced a 2:1 split on Jan. 27 1999 when the stock 
traded at $86.  To accommodate the split, at a special meeting on 
March 18, shareholders authorized 100 mln. shares.  The split 
became effective in trading on April 12 when the stock was then 
at $180.  After the split, the price rose from $90 (split 
adjusted) to its current level.  Since then, in June shareholders 
again authorized 300 mln. shares with only 41 mln. issued.  The 
current price vastly exceeds the price at which they announced 
the last split.  The most recent vote would allow two 2:1 splits, 
or even a 3:1 (don't bet on it) and enough additional shares to 
permit for acquisitions.  B of A Securities issued a buy rating 
last week with a new price target of $170.  This could be fun, 
but not for the weak-stomached.

***Extremely high-priced.  Time value erosion will average about 
$0.60 per trading day (a little less now, a little more later) 
until expiration if the price remains flat.

BUY CALL AUG-130*EXF-HF OI=176 at $20.50 SL=16.25 ITM $8
BUY CALL AUG-135 EXF-HG OI=165 at $18.13 SL=14.00
BUY CALL AUG-140 EXF-HH OI=393 at $15.88 SL=12.50
BUY CALL AUG-145 EXF-HI OI=273 at $13.63 SL=10.50
(only AUG is listed since earnings are 7/22.  Everyone
should be out by then.)

Picked on July 11 at  $136.38    PE = N/A
Change since picked     +1.62    52 week low =$  7.75
Analysts Ratings   10-3-1-0-0    52 week high=$148.19
Last earnings  4/99 est -0.57    actual -0.55 
Next earnings  7-22 est -0.50    versus -0.36
Average daily volume = 2.07 mln. 
Chart = http://quote.yahoo.com/q?s=EXDS&d=3m


VRIO - Verio Inc $82.38 (+7.63)(+7.94)(+4.13)(P4W +8.13)

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.

VRIO had a great week with gains of $7.63.  First, VRIO 
broke its overhead resistance on Monday!  The stock broke 
through the $78 opposition (now its former 52-week high) 
during a big run-up mid-morning and peaked at $78.75.  The 
stock managed to keep a fractionally gain after the profit 
takers were finished for the day.  VRIO continued with 
steady gains the next two days, then spiked up over 5 
points on Thursday on news of a $300 mln. private, 
preferred stock offering.   6 mln. shares of the 6.75% 
Series A convertible preferred stock are being offered to 
institutional investors at a price of $50 p/s.  These 
preferred shares can be converted to common stock when 
Verio's stock price reaches $96.56 (a 25% premium over the 
closing price of $77.25 on July 14th).  The offering will 
close on July 20th.  Investor excitement was evident with 
triple the normal trading volume and another new 52-week 
high set at $83.50.   After 7 consecutive days of gains and 
new highs we expected some consolidation on Friday.  As it 
turned out, the stock maintained its new trading level 
never dipping below $81.50.  Expect a pullback soon and 
please consider using stops for protection. 

The proceeds from the preferred stock offering will be used 
to fund acquisitions and other company investments.  After 
the recent purchase of digitalNATION for $100 mln. cash and 
the $42.5 mln. used in March for AOL to provide exclusive 
Web-page hosting, Verio will certainly welcome the cash.  
On Tuesday, the company announced they had purchased 
privately held digitalNATION.  This acquisition further 
strengthens their leading-edge position in the Web hosting 
business.  Remember, the stock's upward trend began with the 
positive response from investors regarding the software 
deals Verio negotiating with AOL and MSFT.  Plus, earnings 
are not too far away.  They're expected on August 20th.  The 
run-up could possible continue through earnings' season.
However, play smart.  Don't expect VRIO to continue up 
unabated through August 20th.  Look for your entry points.

BUY CALL AUG-75*RLQ-HO OI= 453 at $11.50 SL= 9.25 lower premium
BUY CALL AUG-80 RLQ-HP OI= 707 at $ 8.25 SL= 6.50
BUY CALL AUG-85 RLQ-HQ OI=   0 at $ 5.63 SL= 4.00 new strike
BUY CALL NOV-80 RLQ-KP OI=1609 at $15.88 SL=12.50
BUY CALL NOV-85 RLQ-KQ OI=   0 at $13.63 SL=11.00 new strike

Picked on June 27 at    $62.68    PE = N/A
Change since picked     +19.70    52 week high=$83.50
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 = 797 K
Chart = http://quote.yahoo.com/q?s=VRIO&d=3m


AMAT - Applied Materials Inc. $78.56 (+4.43)

Advanced Micro Devices, Intel, Lucent and Motorola are
some of Applied Materials best customers.  AMAT is a 
leading manufacturer for the semi-conductor industry.
They develop, manufacture, and service wafer fabrication
equipment and spare parts for the industry.  They also
make metrology systems and photomask inspection equipment.

The recent strength of the semi-conductor industry has
benefited this manufacturing company.  AMAT has about
a 20% share of the $20 billion global market for semi-
conductor manufacturing equipment.  The momentum for AMAT
picked up Wednesday, when AMAT gained over $5.00, on over
10 mln. shares (volume) making a new high of $77.63.  Applied 
Materials had been stuck in a $20 range since the first of
the year, trading between $50 and $70 until June 30th when
AMAT managed to push its way through the $70.00 mark.  This 
is primarily a momentum play for AMAT, based not only on its
own strength but that of the industry as well.  Applied Materials 
continued to make its way higher for the balance of the week.
AMAT hit another 52 week high Friday at $79.63, and closed up
$2.19 for the day.  Volume was somewhat light, at 5.30 mln.
shares, although it was an options expiration Friday.  Earnings 
don't come out until August 18, but AMAT could be setting up for 
a run to higher highs.  We would look for the $77-$78 area to
provide support for AMAT.  Enter a new play on further upward
movement accompanied by strong volume, and don't forget to 
set your stops  accordingly.

Not much in the news at this time.  Monday AMAT announced it 
had been honored with the 1998 Supplier Excellence Award from
Texas Instruments.  Winners of the TI Supplier Excellence Award
are companies that have demonstrated their commitment to quality
and continuous improvement.

BUY CALL AUG-75 ANQ-HO OI=2570 at $ 8.25 SL=$6.75
BUY CALL AUG-80*ANQ-HP OI=1733 at $ 5.25 SL=$4.00
BUY CALL OCT-75 ANQ-JO OI=1453 at $11.75 SL=$9.50
BUY CALL OCT-80 ANQ-JP OI=4328 at $ 9.00 SL=$7.25

Picked on July 17, at   $78.56   PE = 282
Change since picked     + 0.00   52 week high=$79.63
Analysts' ratings  17-11-3-0-0   52 week low =$21.56
Last earnings   4/99 est  0.26   actual 0.36 surprise=+38%
Next earnings   8/18 est  0.52   versus 0.19
Average daily volume 8.13 mln.
Chart = http://quote.yahoo.com/q?s=amat&d=3m


The Option Investor Newsletter             7-18-99
Sunday                4  of  7


SLR - Solectron $71.06 (-0.88)(+4.81)(+4.31)

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.

SLR started the week strong.  It made a new 52 week high
at $73.25 after gapping up $1 at the open Monday morning.
The bears decided to come to the party and began to have
their way with Solectron.  By late Tuesday afternoon, SLR
had fallen to its 10dma to a low of $69.31.  It traded in
a narrow $3 range for the balance of the week.  SLR has been
a momentum play since the start.  SLR has recently had a 
pattern of moving up on good volume, stalling and consolidating
on lower than average volume and then making another move.
This is what we are continuing to expect from Solectron.
It closed right on its 10dma and we are expecting another 
bounce from here.  Technically $69.60 is a key level of
support for SLR.  Any advance up accompanied by greater than
average volume would be viewed as a potential buying opportunity.
The electronics industry has been consolidating recently.
Any surprises in the broader markets this week could temporarily
knock the legs out from underneath this bull and take SLR with
it.  Keep your stops close.

SLR announced yesterday it had completed its acquisition of 
Sequel, Inc.  Sequel is privately held company that specializes
in the repair of notebook computers and liquid crystal display's.
SLR will now be able to expand its global services capabilities
by offering its OEM customers direct end-user support.

BUY CALL AUG-70*SLR-HN OI=428 $5.50 SL=$4.25
BUY CALL AUG-75 SLR-HN OI=150 $3.13 SL=$2.50
BUY CALL OCT-70 SLR-JN OI= 98 $7.13 SL=$5.75 (Low OI)
BUY CALL OCT-75 SLR-JO OI=166 $5.75 SL=$3.50

Picked on June 20th at  $64.06   PE = 61
Change since picked    +$ 7.00   52 week high=$73.25 
Analysts' ratings    6-6-6-0-0   52 week low =$26.81
Last earnings   6/99  est 0.20   actual 0.29 surprise=+7%
Next earnings   9/99  est 0.32   versus 0.23 
Average daily volume  1.30 mln.
Chart = http://quote.yahoo.com/q?s=slr&d=3m


TXN - Texas Instruments $154.19 (+7.63)(+4.87)(+5.69)(P3W+16.63)

TXN sold its defense electronics and memory chip units almost 2 
years ago to focus their digital signal processor (DSP) business.  
TXN is the world's largest supplier of DSP's, commanding over 45% 
of the segment.  You will find them in over half the world's cell 
phones, modems, cars, and camcorders to name a few items.  In 
addition, they manufacture microcontrollers, microprocessors, and 
analog and logic chips.  Only one third of its business is in the 
U.S.  75% of its revenues is derived from semiconductor sales.  

TXN will report earnings on July 20 (company confirmed).  They 
announced a 2:1 split Thursday after the close, which is payable 
August 16.  Typically a split announcement prior to earnings is a 
strong sign of management's confidence in the earnings number.  
After all, why would they split only to report poor, expected, or 
even the low end of the whisper number?  Remember when QCOM 
reported blowout earnings last quarter?  They needed a blowout 
after announcing the split; otherwise the stock would have fallen 
to earth like a meteor.  Same for TXN.  Now that we've said that, 
remember that it is only a theory, and Murphy frequently pokes 
big holes in arguments that otherwise make logical sense.  
Despite our inclination to back up the truck, DON"T DO IT!  We 
never recommend holding over earnings and you should be out of 
the play by Monday night (just in case they announce Tuesday 
morning.  Technically, TXN is looking good and set another new 
high on Friday.  Support is in the $147 range.  Be aware that 
there was some selling from its high after the bell, and based on 
OI, there is strong resistance at $150, indicating that investors 
aren't willing to bid the price any higher.  Protect the profits 
and plan to exit the play.  We'll probably pick it back up 
later to play the split.

No new news. . .like a split isn't enough?

Options BELOW are for DAYTRADERS ONLY.  Play is almost over!

BUY CALL AUG-150 TXN-HV OI=3267 at $12.50 SL=10.00
BUY CALL AUG-155 TXN-HX OI= 133 at $ 9.75 SL= 7.25
BUY CALL AUG-160 TXN-HY OI= 851 at $ 7.50 SL= 5.75

Picked on June 10th at $125.75    PE = 98
Change since picked     +28.44    52 week low =$ 45.38
Analysts Ratings    11-8-5-0-1    52 week high=$154.69
Last earnings   04/99 est 0.61    actual 0.65
Next earnings   07-20 est 0.76    versus 0.35
Average daily volume = 2.51 mln. 
Chart = http://quote.yahoo.com/q?s=TXN&d=3m


SEPR -  Sepracor Inc $92.94 (+5.69)

Sepracor researches, develops, and commercializes improved 
compounds of existing pharmaceuticals and biopharmaceuticals.  
These products are new and patented formulas.  They can 
provide the consumer with fewer side effects, improved 
safety, new uses, and even refined dosages.  For instance, 
Sepracor made Allegra as an alternative to Seldane, which 
the FDA had pulled its approval of in 1997.

In this drug and biotech industry mergers are becoming the 
watchword as more companies are consolidating.  Last month, 
Sergio Traversa of Mehta Partners named Sepracor as a top 
takeover pick; especially by an overseas company searching 
for more US exposure.  Then in a BusinessWire article 
on Thursday, Pharmaceutical & Biotech analyst David Saks of 
Gruntal & Company stated he foresees the industry's 
earnings as positive and believes "as more drugs are 
approved by the FDA the biotech sector should do well".  
Put all that together and you have the ingredients for a 
profitable earnings run.  SEPR is expected to report in a 
couple weeks on August 6th.  

This week SEPR found a new support level at $85 and $87 
which put it right on its 10 dma.  Then at the open on 
Wednesday, SEPR cracked its near term resistance of $88.75 
(a daily high set on July 6th) and tested new waters above 
the $90 mark.   We picked up the stock on Thursday when we 
got further confirmation of its direction.  SEPR had 
advanced another $3.63 on strong volume to close at $93.75.  
There was some immediate profit taking Friday morning (a 
nice entry point if you could catch it) but SEPR recovered 
and proceeded to trade steadily around $93 and $94.  
Remember to confirm stock direction and market sentiment 
before you begin a new play.  

BUY CALL AUG- 90*ERQ-HR OI=612 at $ 9.50 SL=6.75
BUY CALL AUG- 95 ERQ-HS OI=  0 at $ 7.00 SL=5.25 new strike
BUY CALL AUG-100 ERQ-HT OI   0 at $ 4.63 SL=3.00 new strike
BUY CALL OCT- 95 ERQ-JS OI= 72 at $12.00 SL=9.50
BUY CALL OCT-100 ERQ-JT OI=297 at $10.00 SL=7.50

Picked on July 15th at   $93.75    PE = N/A
Change since picked       -0.81    52 week high=$140.87
Analysts Ratings      3-3-5-0-0    52 week low =$ 42.25
Last earnings 03/99  est= -1.10    actual= -.93 surprise=15.45%
Next earnings 08-06  est= -1.22    versus= -.63
Average daily volume = 780 K
Chart = http://quote.yahoo.com/Q?s=SEPR&d=3m


CMVT - Comverse Technology Inc $81.38 (+4.25)

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

On Monday, Salomon Smith Barney started new coverage on 
CMVT with a "strong buy" rating and set a short-term target 
price of $95.  Relative support became firmly established 
at $77 and $79.  Then on Thursday, CMVT jumped out of 
support and advanced 3.2% ($2.47) on positive news and 
analyst coverage.  Ladenburg Thalmann & Co reiterated a 
"buy" rating and set their target price at $90.  The big 
news came from Comverse.  They announced their subsidiary, 
Comverse Network Systems, licensed advanced voice 
technology for their Unified Messaging Service from the 
Belgian Speech Technology firm, Lernout & Hauspie Speech 
Products.  The Text-to-Speech system allows callers to hear 
e-mails over the phone.   Comverse is presently focusing 
its attention on attracting wireless and wireline network 
operators, and ISP's to their Unified Messaging Service 
which allows a user to access e-mail, faxes, v-mail, and 
database information from a single mailbox via any 
terminal, desktop PC, laptop, or phone.  No financial terms 
of the licensing agreement were available.  Friday the 
stock proved it could hold its new level and even set 
another 52-week high at $82.38 on fair volume.  Take a look 
at a 5 or 10-day chart and you can see the opportunities 
for solid entry points intraday.   However, the 
fluctuations aren't so dramatic as to hamper the use of 
stop losses (versus the wild and risky Internet plays).

Earnings are expected to be positive and are due on August 
25th.  Earlier at the end of June, two other analyst also 
reiterated coverage for CMVT.  Lehman Brothers put out 
their "buy" rating and a target price of $90 while SunTrust 
Equitable had a "strong buy" rating, but only a mark of 

Note:  at this time there are no strikes above 90 are 

BUY CALL AUG-75 CQV-HO OI= 37 at $9.25 SL=7.00
BUY CALL AUG-80*CQV-HP OI=148 at $5.75 SL=4.00
BUY CALL AUG-85 CQV-HQ OI=119 at $2.94 SL=1.50
BUY CALL OCT-80 CQV-HP OI=204 at $9.00 SL=6.75
BUY CALL OCT-85 CQV-HQ OI= 51 at $6.38 SL=4.75

Picked on July 18th at $81.38    PE = 48
Change since picked     +0.00    52 week high=$82.38
Analysts Ratings    8-1-0-0-0    52 week low =$29.37
Last earnings 04/99  est= .44    actual= .47 surprise=9.36%
Next earnings 08-25  est= .49    versus= .37
Average daily volume = 973 K
Chart = http://quote.yahoo.com/q?s=CMVT&d=3m


CSCO - Cisco Systems $66.00 (-1.06)(+5.75)(+2.81 Split Adjusted)

Cisco builds 85% of the routers and switches that make the 
Internet work.  They are the leading supplier of products that 
link local and wide area networks.  The company's other products 
include dial-up access servers and network management software.  
Cisco has been on an acquisition binge (about 35 since 1993) to 
broaden its product line.  It also derives revenue by licensing 
products as it seeks to widen the influence of its Cisco 
Internetwork Operating System (Cisco IOS) software, in hopes of 
making 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 

More consolidation and a flat looking chart. . .ho hum.  Since 
the end of June, CSCO has traded in a range between $63 and $67, 
give or take a spike in either direction.  As we noted all week, 
that's OK with us.  The longer CSCO forms a base, the stronger 
the anticipated run into earnings on August 10 (company 
confirmed).  $65.50 seems to be holding as intra-day support.  
Resistance is way up over $69.  Any breakout over $67.50, as long 
as it is not a gap-up opening, and is accompanied by strong 
volume is buyable.  We still have time.  Wait for the play to 
come to us.  If you are already in the play, just be sure to set 
a stop in case of a market-wide reversal (something we may see 
after setting 3 new highs in a row).

In agreements reached this week, CSCO will build a national 
flight information and reservations network for the Civil 
Aviation Administration of China, and Intel will begin using CSCO 
technology to build high-speed DSL modems.  Regarding the Intel 
deal, INTC says that with the standardization of modem protocol 
and proliferation of users, it is now profitable to mass-produce 
the product for a large market, based on CSCO's patented 

BUY CALL AUG-60*CYQ-HL OI= 5155 at $7.63 SL=5.75 ITM $6
BUY CALL AUG-65 CYQ-HM OI=11852 at $4.13 SL=2.50
BUY CALL AUG-70 CYQ-HN OI=19101 at $1.94 SL=1.00
BUY CALL OCT-65 CYQ-JM OI= 7917 at $6.88 SL=5.25
BUY CALL OCT-70 CYQ-JN OI=11817 at $4.38 SL=2.75

Picked on June 29th at  $62.50    PE = 115
Change since picked      +3.50    52 week low =$20.56
Analysts Ratings   19-12-0-0-1    52 week high=$69.25
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 =15.18 mln. 
Chart = http://quote.yahoo.com/q?s=CSCO&d=3m


LU - Lucent Technologies, Inc. $78.44 (+6.50)(+1.25)(+7.00)(+3.00)

LU is a spin off of mama bell AT&T.  The company makes telecom
equipment and software, along with business communications
systems and wireless networks.  LU is, in fact, the largest
producer of these products in North America.  Actually, it is
technology by Bell Labs that provides the basis for a lot of
LU's products.  The company has strengthened its broadband
networking market through acquisitions.  Major competitors
include Nortel Networks, Alcatel and Cisco Systems.

LU continues to make moves forward and rightly so as the Tech
sector continues to make new highs.  LU has earnings in one
week and the feeling is the company will announce very strong
numbers.  The stock continually keeps making new 52 week highs
and has very strong technicals.  We will only be keeping this
stock as a play for the next half week, as we don't advise 
holding stocks over earnings.  This earnings season, even 
stocks that announce strong numbers are getting hit after
they announce.  Take a look at Yahoo!, Ameritrade, and 
Earthlink to name a few.  

Lucent has recently bought a few companies to help add strength
do different areas of its business.  The company was also listed
as a stock that Fidelity Investment's fund managers have been
buying aggressively (actually, one of their new top 10 holdings).

BUY CALL AUG-75*LU-HO OI=10190 at $6.25 SL=4.75 ITM $3.00
BUY CALL AUG-80 LU-HP OI= 7217 at $3.50 SL=1.75
BUY CALL OCT-80 LU-JP OI= 7074 at $6.25 SL=4.75
BUY CALL OCT-85 LU-JQ OI=  724 at $4.25 SL=3.25

Picked on June 29th at $66.69    PE = 56
Change since picked    +11.31    52 week low =$26.72
Analysts Ratings  9-11-11-0-0    52 week high=$79.75
Last earnings  04/99 est 0.15    actual 0.17 
Next earnings  07-22 est 0.23    versus 0.16
Average daily volume = 9.12 mln
Chart = http://quote.yahoo.com/q?s=LU&d=3m


NOK - Nokia Corp $98.13 (+3.69)(-.12)(+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.
Nokia has been on a run since early June, with a couple of 
short periods of consolidation. After its latest four days of 
consolidation, Nokia headed north again mid-week, kick-started 
by good earnings from Motorola. It pushed back above its 10 
dma, where it remains. Motorola's growth was attributed to 
improving chip sales and strong growth in wireless phone sales. 
That bodes well for NOK, the leading wireless phone maker, as 
it heads toward its own earnings date.  Nokia has also announced 
a number of new telecom network deals in recent months. Another 
positive for NOK is that its trading volume picked up a bit on 
Friday, when the stock gained $1.13. Market permitting, the 
stock should provide another 2 to 3 days of good gains. Nokia 
reports earnings July 22nd, BEFORE the bell, so plan to close 
your positions by the end of trading on Wednesday.

On Friday, Nokia announced an agreement with Fujian Mobile 
Telecommunications Bureau to provide both equipment and services 
as part of an expansion of Fujian's GSM network in China.

BUY CALL AUG- 95*NAY-HS OI=1337 at $7.63 SL=6.00
BUY CALL AUG-100 NAY-HT OI=1643 at $4.88 SL=3.00
BUY CALL OCT-100 NAY-JT OI= 529 at $8.50 SL=6.50

Picked on June 15th at $82.00    PE = 44
Change since picked   +$16.13    52 week low =$29.53 
Analysts Ratings    9-5-0-0-0    52 week high=$97.63
Last earnings 03/99 est  0.39    actual 0.48 surprise=+26%
Next earnings 07-22 est  0.49    versus 0.35
Average daily volume = 2.15 mln.
Chart = http://quote.yahoo.com/q?s=NOK&d=3m


NXLK - Nextlink Communications, Inc. $95.94 (+2.94)(+14.94) 

Nextlink Communications is a local exchange carrier that 
provides telecommunication services via its own fiber-optic 
network.  They provide switched local and long distance 
services to primarily small to medium-sized businesses. 
This fast growing broadband telecommunication provider has 
26 networks in 15 states and services in 41 markets.  Just
this week they began offering commercial service in 
Northern and Central New Jersey.  This company is proving 
itself to be one of the fastest growing end to end 
broadband providers in the industry.

An unexpected, but very welcome surprise hit the press on 
Thursday.  Nextlink announced they are having a 2:1 stock 
split payable on August 27th!  However, it is subject to 
shareholders' approval of increasing the number of 
authorized shares.  According to information we previously 
had for NXLK, there's 110.33 mln. shares authorized and 
only 35.76 mln. issued; therefore plenty of shares 
available for the proposed 2:1 stock split.  After 
contacting Investor Relations at Nextlink, they explained 
there is a necessity for a further increase in the number 
of shares.  Many of the existing shares authorized are 
actually part of reserve designated for company options, 
convertibles, 401K plans, etc. and cannot be used for a 
common stock split.  

NXLK was unstoppable Monday gaining another $4.75 and 
setting its newest 52-week high at $98.44.  For the next 
two days the stock pulled back slightly trading in a 
narrower range around $92-94.  Then bang, a 2:1 split 
announcement drove NXLK upwards as it tested near 
resistance and claimed $5.13 for the day.  Friday, the 
stock came out strong but experienced some minor 
consolidation on moderate volume.   At this point, solid 
support is difficult to determine with the stock jumping 
between $90 and $98.   But now the sky's the limit for 
NXLK.  Earnings are expected on July 30th followed by a 
proposed 2:1 stock split on August 27th.  The run-up may 
continue.  Keep stop losses in place for protection!

BUY CALL AUG- 90*QNF-HR OI=124 at $11.25 SL= 9.00 wait for a dip
BUY CALL AUG- 95 QNF-HS OI=231 at $ 8.50 SL= 6.50
BUY CALL AUG-100 QNF-HT OI=105 at $ 6.50 SL= 4.75
BUY CALL OCT- 95 QNF-JS OI= 58 at $13.63 SL=11.00
BUY CALL OCT-100 QNF-JT OI= 19 at $11.50 SL= 9.25

Picked on July 11th at  $93.00    PE = N/A
Change since picked      +2.94    52 week high=$98.44
Analysts Ratings     7-0-4-0-0    52 week low =$10.56
Last earnings 03/99 est= -2.28    actual= -2.17 surprise=4.82%
Next earnings 07-30 est= -2.43    versus= -1.42
Average daily volume = 546 K
Chart = http://quote.yahoo.com/q?s=NXLK&d=3m


VOD - Vodaphone AirTouch $214.25 (+7.13)(+1.63)(+.75)(-8.06) 

Vodaphone is the number one mobile communications company in
the UK and recently doubled its size by purchasing AirTouch
Communications.  The new Vodaphone AirTouch operates analog
and digital cellular networks, along with paging and mobile
data services.  The company serves 29 million customers in
23 countries.  VOD's major competitors are British Telecom,
AT&T and Cable & Wireless.

After a bout of four straight down days, VOD came back strong
and has now gained the last three days in a row.  The stock
is at a critical resistance level.  VOD is now trading just
below its 52 week high and has formed a triple top.  If the
stock can break its high on strong volume, it could really 
jump up.  VOD does have a tendency to channel up and down,
so don't expect a straight up gain, but with a 4-1 stock
split announcement in the works to be announced on July 21, 
we do see VOD breaking to new highs [Well, we would like
to see VOD break to a new high.  Nothing is guaranteed and
this almost seems too easy.  That means you have to be on
guard and watch your play! - Kimo]

Not much news to report on the VOD front, but the stock seems
to be the beneficiary of its strong new customer numbers that
the company announced last week.  The company added 587,000
net new customers last quarter, which was an increase over the
previous years quarter of 206,000.  

BUY CALL AUG-210 VOD-HB OI=1806 at $12.50 SL= 9.75 ITM $4.25 
BUY CALL AUG-220*VOD-HD OI=2041 at $ 7.50 SL= 5.75
BUY CALL OCT-210 VOD-JB OI= 222 at $20.63 SL=16.00 ITM $4.25
BUY CALL OCT-220 VOD-JD OI= 258 at $16.25 SL=12.50
BUY CALL OCT-230 VOD-JF OI=  63 at $11.88 SL= 9.25

Picked on June 26th at $204.75    PE = 80 
Change since picked      +9.50    52 week low =$ 94.00 
Analysts Ratings     4-4-1-0-0    52 week high=$216.44 
Last earnings   04/99 est    ?    actual ? 
Next earnings      ?  est 1.56    versus ? 
Average daily volume = 1.16 mln
Chart = http://quote.yahoo.com/q?s=VOD&d=3m


BBY - Best Buy $75.69 (-.31)(+3.00)(+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 took off following a record first quarter. After it 
was added to the S&P 500 on June 29th, it exploded further to 
the upside. On July 9th, however, the succession of daily new 
highs came to an end and the stock entered a period of 
consolidation to digest its gains. Technical indicators have 
turned negative, and we recommend that new positions be added 
only after volume returns and the price begins to climb again. 
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.

There is no new news on BBY. The period of consolidation the 
stock has been stuck in may be nearing an end, since the daily 
lows have gotten a bit higher over the last few days. With a 
reported positive inflow to mutual funds over the last few 
weeks, index fund managers will have buy more Best Buy soon. 
If Greenspan says anything this week that suggests a rate hike 
is becoming more likely, high growth retail stocks like BBY 
would really suffer.

BUY CALL AUG-75*BBY-HO OI=318 at $6.38 SL=4.75
BUY CALL AUG-80 BBY-HP OI=436 at $4.38 SL=2.75
BUY CALL SEP-75 BBY-IO OI=210 at $8.63 SL=6.50
BUY CALL SEP-80 BBY-IP OI=131 at $6.50 SL=4.75

Picked on July 1st at  $68.81    PE = 51
Change since picked   +$ 6.88    52 week low =$15.97 
Analysts Ratings    6-7-3-0-0    52 week high=$80.50 
Last earnings 05/99  est  .20    actual  .22 surprise=10%
Next earnings 09-15  est  .29    versus  .21 
Average daily volume = 1.83 mln.
Chart = http://quote.yahoo.com/q?s=BBY&d=3m


EL - Estee Lauder Cos $56.00 (+4.19)

For those not familiar with the Estee Lauder name, welcome to 
the world of beauty.  The Estee Lauder Cos. sell high end
cosmetics, skin care and fragrances.  The company owns popular
brands like Clinique, Bobbi Brown essentials and jane.  These
products aren't found in your local drugstore, but at 
specialty retailers and department stores.  A few of its
competitors are L'Oreal and Revlon.

EL recently broke out of a consolidation phase and since has
made strong moves up.  The stock closed right on its daily
and 52 week high on Friday and has very strong technicals.
Last earnings season, stock in EL ran from $43.25 to $49.00
the week before earnings.  We are now 7 trading days from
earnings and though we could see some sporadic profit taking,
we feel EL will continue to run up higher into its earnings

There isn't any news to account for the recent run up in EL
shares, but it looks like the stock went through a little bit
of a post split lull and now has decided to start a new move
up.  Be careful of profit taking since the shares have gained
about $8 in the last few weeks.  This is quite a bit for a 
slower moving stock like EL.

BUY CALL AUG-50*EL-HJ OI=161 at $6.50 SL=4.75 ITM $6.00 low prem 
BUY CALL AUG-55 EL-HK OI= 41 at $3.38 SL=1.75 ITM $1.00
BUY CALL AUG-60 EL-HL OI=  0 at $1.25 SL=0.00
BUY CALL OCT-55 EL-JK OI= 97 at $4.38 SL=3.25 ITM $1.00
BUY CALL OCT-60 EL-JL OI=  0 at $2.75 SL=1.50
(60 strikes are new, wait for open interest)

Picked on July 16th at $56.00    PE = 55
Change since picked     +0.00    52 week low =$23.34
Analysts Ratings    1-6-1-0-0    52 week high=$56.00
Last earnings  04/99 est 0.19    actual 0.19 
Next earnings  07-27 est 0.18    versus 0.16
Average daily volume = 343 K
Chart = http://quote.yahoo.com/q?s=EL&d=3m


HD - Home Depot $69.63 (+3.81)

Toys R Us for Men.  Every new Home Depot contains over 130,000 
square feet of tool, hardware, construction material and 
gardening heaven in a discount warehouse environment.  With over 
800 stores across the U.S. and Canada, HD is the largest home 
improvement chain in the country offering discount prices with a 
helpful, generally knowledgeable staff that prides itself on good 

Technically, HD has an exceptionally fine looking chart with 
indicators in strong positive territory over the last 45 days.  
Over a period of 10 days, beginning 12 days ago, HD showed good 
basing activity between prices of $63 to $66.  Then Abby Joseph 
Cohen took over and specifically named HD in favorable light on 
CNBC.  Also Fidelity Magellan holds HD as 1 of its top 10 picks.  
That's all it took for HD to march to a new high on Thursday of 
$69.94 on strong volume.  Though you could call it a loss of 
$0.31 cents Friday, that was also just $0.31 off it's high of the 
day, still a bullish pattern.  Earnings are not until August 18, 
so we're calling this a momentum play for now, but will switch it 
to an earnings play about 2 weeks prior if the pattern holds.  
Confirm market direction before playing or target shoot your 
entry.  Use stops to protect profits and enjoy the ride.

Some news is noted in the play above.  Though customers can not 
yet purchase goods from the Home Depot Internet site, the ability 
to do so will be available in late Fall.

***No SEP or OCT strikes available yet

BUY CALL AUG-65*HD-HM OI=6839 at $5.88 SL=4.25 ITM $4.63
BUY CALL AUG-70 HD-HN OI=6054 at $2.63 SL=1.25
BUY CALL AUG-75 HD-HO OI=2269 at $0.88 SL=0.00
BUY CALL NOV-70 HD-KN OI=3078 at $5.75 SL=4.00
BUY CALL NOV-75 HD-KO OI=   0 at $3.75 SL=2.00 feeling brave?

Picked on July 18 at  $69.63    PE = 60
Change since picked    +0.00    52 week low =$31.62
Analysts Ratings  6-14-6-0-0    52 week high=$69.94
Last earnings  5/99 est 0.28    actual 0.32 surprise = 14.29% 
Next earnings  8-18 est 0.39    versus 0.31
Average daily volume = 3.51 mln. 
Chart = http://quote.yahoo.com/q?s=HD&d=3m


The Option Investor Newsletter             7-18-99
Sunday                5  of  7


SNE - Sony Corp $125.56 (+11.18)(+1.63)(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.

Amazing, simply amazing is what we would have to say concerning
Sony.  SNE moved up over $11.00 for the week.  The volume behind
this move has been very strong, averaging over 250K.  This move 
has come primarily on the news that by all indicators the 
Japanese economy is recovering, boosted by a string of favorable
earnings reports from several brokerages on Thursday.  The 
tensions between Taiwan and China did put a damper on trading on 
Friday.  The Nikkei fell 183.56 or about 1% to end the day at 
18,248.30.  SNE has given back only $1.50 after setting a new 
high of $126.88 on Thursday.  Technically SNE still looks strong.  
We would be remiss if we didn't remind you that profit taking 
could happen at any time.  SNE has moved up from the $89.25 level 
since early June.  That's over a 42% increase in the last six 
weeks, and it has only paused twice to catch its breath.  If SNE 
keeps going then great, but please move your stops up to maximize 
your profits on this great play.  We really are expecting some
kind of pullback soon.  SNE's 10 dma (previous support) is 
several points below it.  Aside from Friday, SNE has been up
several days in a row.

Not much new in the way of news at this time.

**Keep your stops tight if considering a new position.**

BUY CALL AUG-120*SNE-HD OI=150 at $8.88 SL=$7.00 wait for dip
BUY CALL AUG-125 SNE-HE OI= 19 at $6.00 SL=$4.75 (Low OI)
BUY CALL OCT-125 SNE-JE OI=  8 at $9.63 SL=$7.50 (Low OI)

Picked on June 29th at $108.19   PE = 30
Change since picked   +$ 17.37   52 week high=$126.88
Analysts' ratings    1-0-0-0-0   52 week low =$ 26.81
Last earnings   3/99   est N/A   actual N/A surprise=+0%
Next earnings   3/00   est N/A   versus N/A 
Average daily volume      196K
Chart = http://quote.yahoo.com/q?s=sne&d=3m



GE - General Electric $118.88 (+1.75)

GE might not call itself a conglomerate, but it is. Its 14 
divisions make airplane engines, appliances, lighting, 
medical systems, plastics, power systems, and also include 
NBC, financial services, and electrical distribution and 
control. It is one of the largest and most diversified 
industrial corporations in the world.

GE has been in a general uptrend with intermittent pullbacks 
since early June. On July 7th, just ahead of earnings, it 
pushed through resistance at its old all-time high of $177.43 
and broke out to a new high of $118.75. It also set a new 
closing high of $117.94 on strong volume. Earnings came in a 
penny ahead of expectations for GE, whose earnings consistently 
meet analysts' estimates, but even so, GE fell back to bounce 
off its 10 dma and did not retest the new high again until 
Friday. On Friday, July 16th, GE not only set a new all-time 
high of $119.00, but it also CLOSED above the recently set 
$118.75--a bullish sign for a stock with over 3.2 bln shares
outstanding. GE gained $1.31 that day, and it closed right near 
the day's high. Market permitting, GE will light up in the 
coming days.

In recent news, GE made the top spot on both Forbes Global 
Super 100 list and its World Super Fifty list for the second 
year in a row. It also appointed David L. Calhoun as president 
and CEO of GE Employers Reinsurance Corp. Mike Zafirovski will 
take Calhoun's former job as President and CEO of GE Lighting. 
In a display of the company's commitment to the Internet, John 
F. Welch, chairman of GE, will join the board of NBC Internet,
a GE unit.  Overseas, the British government has given the O.K. 
for GE Power Systems and BP Amoco to build a $500 million, 500 
megawatt power plant in South Wales--designed to be the most 
efficient gas-fired power station in existence. Finally, GE 
Capital Corp. will begin selling trust funds in Japan in August.

BUY CALL AUG-115*GE-HC OI=3832 at $6.50 SL=4.75
BUY CALL AUG-120 GE-HD OI=2661 at $3.25 SL=1.75
BUY CALL SEP-115 GE-IC OI=4343 at $7.88 SL=6.25
BUY CALL SEP-120 GE-ID OI=3764 at $5.00 SL=3.25

Picked on July 1st at $118.88    PE = 39
Change since picked   $+ 0.00    52 week low =$ 69.00 
Analysts Ratings    7-9-2-0-0    52 week high=$118.75 
Last earnings 06/99  est  .84    actual  .85 surprise=01%
Next earnings 10-08  est  .79    versus  .69 
Average daily volume = 5.00 mln.
Chart = http://quote.yahoo.com/q?s=GE&d=3m

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 

FDX - Federal Express Corp. $47.44 (-1.06)(-6.43)

Headquartered in Memphis, TN, FedEx is the world's largest 
express shipping company. Its 192,000 employees ship over 3.2 
million packages daily to 210 countries around the world. In 
addition to air freight, FDX offers business-to-business 
delivery through its RPS ground shipping unit. Its entire hub 
and spoke shipping system (not just its airplanes and trucks) 
operates like finely tuned, well-oiled machine.

We added FedEx last week after it went into a tailspin the 
week before. It began its descent when it failed to meet the 
high market expectations in its fourth quarter earnings results. 
Although the company beat analysts' estimates by $.02, and 
topped last year's fourth quarter by $.16, it could not deliver 
the "whisper number" built into the stock price. An earnings 
warning from Airborne Freight 10 days ago did not help matters, 
either. Perhaps the biggest reason FDX continues to lose altitude 
is the rising cost of fuel. Oil prices passed their 18 month 
high last week, and set a new high on Friday. High oil prices 
are depressing the entire Transportation Index, since fuel is 
a large portion of expenses for an airline. Although FDX uses 
hedging to offset fluctuations in oil prices, an extended 
period of high fuel costs will still hurt the airline. FedEx 
has remained below its 10 dma for the last 2 weeks. Long term, 
FedEx is a healthy and strong company, but in the short term, 
we expect it to fall lower. Caution: a significant drop in oil 
prices would hurt this play.

BUY PUT AUG-45 FDX-TI OI= 84 at $1.88 SL=1.00
BUY PUT AUG-50*FDX-TJ OI=471 at $4.38 SL=2.75

Average daily volume = 1.39 mln.
Chart = http://quote.yahoo.com/q?s=FDX&d=3m


JCP - J.C. Penney $46.50 (+1.06)(-4.19)

J. C. Penney Company, Inc. main business consists of providing 
merchandise and services to consumers through department 
stores that include catalog departments.  The company markets 
apparel, accessories, home furnishings, jewelry and shoes.  
To boost sales at its JCPenney stores, the company is expanding 
that chain's private-label brands (Arizona Jean Co., Hunt Club, 
Worthington) and plans to feature them in special boutiques 
within the stores. The Company also has several direct 
marketing insurance subsidiaries which market life, health, 
accident and credit insurance as well as a growing portfolio 
of non-insurance products.

JC Penney started the week off slowly but got a series of 
management changes to end the week on a positive note.  It 
appeared that JCP was about to crack the $45 support level 
until the announced a management shake up that involved hiring 
Vanessa Castagna as Executive Vice President and Chief 
Operating Officer.  This is the first time in awhile that 
JCP has hired from outside their company but she is more than 
qualified after her experience at Wal-mart.  She has played 
a big role in WMT's success.  JCP also announced some other 
changes in upper management.  This was the reason for the 
pop up on the open Thursday.  We are keeping the stock 
as a put play since it has failed to move above 50-dma at 
$49.  This was the kind of news that really only has a short 
term impact. The new management can't turn things around 
over night so we expect the stock to challenge support at 
$45 again soon.  Plus any market correction will punish the 
weakest stocks first and JCP falls into that category.

BUY PUT AUG-50 JCP-TJ OI=640 at $4.50 SL=2.75
BUY PUT AUG-45*JCP-TI OI=777 at $1.56 SL=0.75

Average Daily Volume = 844 K

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


WPI- Watson Pharmaceutical $34.06 (-1.88)(-2.25)

Watson Pharmaceuticals manufactures and markets generic and 
proprietary drugs, focusing on hard-to-make niche 
pharmaceuticals.  The company makes generic versions of brand-
name products, including anti-hypertensives Tenex and Dilacor, 
analgesics Vicodin and Lortab, and asthma drugs Proventil 
and Ventolin.  Watson's proprietary drugs include Microzide, 
an anti-hypertensive, Loxitane, an anti-psychotic drug, and 
Norco, an analgesic.  The company markets its products to 
drug distributors, wholesalers, drugstore chains, hospitals, 
and HMOs. 

Watson is showing all the signs of a company in deep trouble 
regardless of the company announcements saying everything is 
ok.  As you all know, there is never a sure thing in the market 
and it pays to use caution but let's look at some of the signs. 
First, look at a chart with the 50-dma.  The company has been 
saying for months that everything is being taken care of but 
the stock has on numerous occasions been denied passage through 
the 50-dma.  Not only denied but fervently pushed back down.  
This is usually a sign of shorting, which is confirmed by the 
high short ratio of 6.00.  Second, you should always be weary 
of a company that delays its filing of quarterly results until 
the last minute.  They have 45 days after each quarter to 
release the results unless it is the year end, which allows 
them 90 days after the quarter.  WPI is scheduled for Aug 12 
or 3 days before the deadline.  Third, check out action 
recently on the put contracts.  It's usually tough to find 
good volume and open interest for put plays but not with WPI.  
Their puts are more active than the calls, even on the out of 
the money contracts like the $30s.  So it is appearing as if 
the writing is on the wall for Watson.  We do want to emphasize 
the importance of stops with this play.  If a surprise of some 
sort rattles the stock, it could cause the short players to 
cover.  This would cause a spike up in the stock price so 
keep your stops set.

BUY PUT AUG-40*WPI-TH OI= 823 at $6.63 SL=4.75 ITM
BUY PUT AUG-35 WPI-TG OI=2867 at $3.00 SL=1.50

Average Daily Volume = 578 K

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


DE - Deere and Company $35.69 (-2.50)

Deere is involved with providing & administering financing 
for retail purchases of new & used equipment manufactured by 
the Company's agricultural, industrial and commercial & 
consumer equipment divisions.  The company makes a full line 
of farming, construction, earth-moving, forestry, and lawn 
and garden maintenance machines.  Its construction equipment 
includes backhoes and excavators.  These and other products 
make Deere the world leader in farm equipment and other 
specialized products.

DE and other heavy equipment makers are struggling recently 
as profit warnings are emerging for the sector.  On Wednesday 
industry analysts began announcing that the sector earnings 
for the current quarter will come in below last year and under 
forecast.  They cited the Asian crisis and falling commodity 
prices for slowing demand for new equipment.  CAT proved the 
analysts correct on Friday by reporting results that were 
.02 cents below expectations.  CAT also said the rest of the 
year looks weak.  These concerns have sent DE tumbling toward 
year lows.  The stock is currently hovering near the 200-dma.  
This may provide support for the stock over the next couple 
sessions but it looks to have broken just underneath that 
mark.  Cautious investors may want to wait for the stock to 
fall below $35 before opening new plays.  The next stop from 
there should be the old 52-week low at $28.38.  If we get 
the pullback in the market that we are expecting, it should 
trigger even more selling in DE and start a new push downward.  

BUY PUT AUG-40*DE-TH OI= 204 at $4.75 SL=3.25 Higher Delta
BUY PUT SEP-35 DE-UG OI=1123 at $1.75 SL=0.88

Average Daily Volume = 1.06 mln

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

NDB -  National Discount Brokers $48.44 (-5.75)

NDB is a holding company engaged in NYSE and AMEX specialist 
activities and also offers online retail brokerage trading.  
They are a national trading firm with offices all over the 
country that acts as market makers for some 3400 different 
NASDAQ and OTC stocks.  Through their division Triak, they 
offer deep-discount trading for individual investors.  This 
part of the business has been put in the forefront as the 
online trading war heats up.

Has anyone noticed the weakness in online brokers at a time 
when they have normally sparkled in the past?  This group 
usually has a fabulous earnings run as companies tell 
investors of the thousands of new customers signed up during 
the previous quarter.  But it has been relatively quiet this 
time around.  Charles Schwab who released earnings on Friday 
probably summed it up best when they said the second half of 
the year would show signs of slow down and lower profits.  
All the major companies have reported earnings expect for 
E-trade which is the first part of this week.  There may be 
some anticipation for EGRP's numbers but that could be the 
entry point we are looking for.  Then the group will be in a 
good position to under perform in the near term, as long as 
E-trade doesn't have some sort of surprise with their earnings.  
We especially like NDB since it had a big move up the end of 
June.  It looks over-valued and may have some catching up to 
do with other stocks in the sector.  Watch out for support 
from the 50-dma around $47.50 but any break of that level 
will be a bearish indicator for NDB.         

BUY PUT AUG-50 NDB-TJ OI=566 at $5.38 SL=3.75
BUY PUT AUG-45*NDB-TI OI=619 at $3.25 SL=1.75

Average Daily Volume = 1.32 mln

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


U - USAir Group Inc. $40.19 (-4.81)

As one of the top 10 airlines in the U.S., US Airways Group 
is the holding company for US Airways, Inc., Shuttle, Inc., 
Allegheny Airlines, Inc., Piedmont Airlines, Inc., and PSA 
Airlines, Inc.  As a certified air carrier, they are engaged 
primarily in the business of transporting passengers, mail, 
and property.  USAir is still trying to emerge from a rough 
decade which has included low-fare competition, labor disputes, 
and early retirement by more than 300 pilots.  Currently one 
of their more popular routes comes from Shuttle, Inc. which 
operates the US Airways Shuttle between New York and 

Higher oil prices and lingering problems have sparked a new 
round of selling in USAir.  It seems the company is unable 
to put old problems behind them and are now facing other 
troubles as well.  On Thursday U warned for the second time 
this year that earnings will miss estimates.  They cited 
recent revenue trends coupled with higher labor costs and 
fuel prices for the shortfall which is expected to last the 
remainder of 1999.  This announcement caused one analyst 
downgrade from ING Barings who lowered U from a buy to a 
hold.  It also caused S&P to revise the USAir's debt rating 
lower to stable from positive.  The final blow came Friday 
when their mechanics rejected a tentative labor pact and 
approved a strike, if necessary.  All of this has put U's 
stock in a nose dive.  We don't see much support for the 
stock or any possible change in sentiment over the short- 
term.  In fact, it closed right near the low on Friday.  But 
be careful picking the entry point because of the spike down 
it had on Thursday and Friday.  We might get a bounce from 
investors looking for an oversold position.  It is also 
important to watch the entire sector for signs of life since 
they usually move in tandem.  The price of oil will play a 
role also as Airlines are nervous now that we are back above 
the $20 a barrel level.

BUY PUT AUG-45 U-TI OI=330 at $5.38 SL=3.75
BUY PUT AUG-40*U-TH OI=327 at $2.06 SL=1.00

Average Daily Volume = 859 K

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


Breaking Records For Breaking Records...

U.S. stocks continued their record-breaking achievements across
the board Friday, ending a week of solid corporate earnings. The
Dow industrial average rose another 23 points to 11,209, beating
the previous record of 11,200. The Nasdaq index of technology
stocks gained 25 points to close at 2,864, its third consecutive
record finish. The S&P 500 index climbed to another new high,
rising 9 points to 1,418. In the broader market, advancers edged
out decliners 1,451 to 1,446 on a day of active trading (double
expiration of stock/index options); 710 million shares on the
New York Stock Exchange.

Thursday's new plays (positions/prices):

QualComm         QCOM  AUG125C/140C  $11.00  debit
Cyberian Outpost COOL  AUG12-CC      $11.12  debit
Cyberian Outpost COOL  AUG12-PUT     $1.38   credit
Amazon           AMZN  AUG105C/120C  $12.50  debit

Qualcomm (QCOM) was subdued during the morning session and the
bullish debit spread was easily opened at the target entry price
before it moved higher later in the day. Cyberian Outpost (COOL)
was quite a different story. The stock price moved up quickly,
threatening to leave everyone behind. It faltered near the end
of amateur hour and the selling came on in earnest. Technical
traders noticed that the stock had moved up significantly over
the past two days and most of the new players were waiting for
a lower entry price. In our case, we bought the position at the
recommended target even though it traded below that price later
in the day. Amazon (AMZN), a position that we commented on but
didn't have time to publish, was available at the recommended
net debit (tracking play only).

Portfolio plays:

Network Associates was an interesting volatility play. The stock
price finished right at our sold position and a 'market on close'
order produced a $0.50 profit on the overall spread (three days).
In our case, we rolled forward to the August $20 call, hoping to
increase our profit with the sale of another overpriced option.
Other big winners this month include the credit-spread butterfly
on British Telephone (BTY) that finished at the maximum profit;
$2.12, the Sandisk (SNDK) debit straddle that is now trading at
a $30+ return (we closed for $5 credit), and the Earthlink (ELNK)
covered-combo that returned $2.12 on a position that was $10 ITM.

Sun Microsystems was a big mover today in the long term portfolio.
The stock price climbed $2.38, allowing the perfect roll-out to
August positions for our 2001 LEAP. General Motors (GM) continues
to recover from last week's lawsuit news and Monday should offer
an excellent opportunity to sell new positions in our January
2001 calendar spread.


RAD - Rite Aid  $23.37     *** Volatility Play ***

Rite Aid is one of the nation's leading drugstore chains with
annual revenues of nearly $13 billion and approximately 3,800
stores in 30 states and the District of Columbia. RAD plans to
open 100 new stores each year and the prototype store features
easy access, expanded parking, a full-service and drive-thru
pharmacy, one-hour photo finishing, express mail service,
convenience foods, and expanded cosmetics departments.
Rite Aid also owns PCS Health Systems, which provides pharmacy
benefit management programs and services that can help improve
patient health and reduce health care costs. Rite Aid's private
label program is one of the industry's largest, with over 1,200
brands that enjoy a high level of customer loyalty.

Revenues are everything in retail and Rite Aid just announced
that same-store sales for June rose 8% percent over the prior
year period led by a 15% increase in the pharmacy department.
This type of profit is exactly what the company needs to return
to investor's favor and analysts say the stock is becoming more
attractive at the current price. There are also those who think
that a large scale merger makes sense now for the giants in the

Options traders believe it may be Wal-mart (WMT) or some other
large retail chain and implied volatility and volume increased
this week on rumors that the drugstore company is now a takeover
candidate. Both Wal-Mart and Rite Aid declined comment but the
fact that Wal-Mart said it will sell up to $10 billion in debt
securities fueled the speculation.

The front-month disparity offers us an excellent opportunity to
speculate on the outcome of the rumors.

PLAY (speculative - bullish/calendar spread):

BUY  CALL OCT-25 RAD-JE OI=1370 A=$2.31
SELL CALL AUG-25 RAD-HE OI=1011 B=$1.56

It is generally best to establish this type of spread at least
2 - 3 months before the long option expires, capitalizing on the
ability to sell another option against the longer-term position.
That is the basic idea in this spread play; selling time value
in the options when they are overpriced (high implied volatility)
and buying it back (if necessary) when they return to intrinsic
value. Ideally, the spreader would like to have the stock finish
just below the sold strike when the near-term option expires. If
the short options are in-the-money at expiration, he will have
to buy them back to preserve the long-term position.

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


RIGS - Riggs National Corp.  $20.50 *** Something Fishy Here! ***

Riggs National Corporation, the largest bank holding company 
headquartered in the nation's capital, has 53 branches in the
Washington, D.C. metropolitan area, as well as three locations
in London, England.

The share price was up almost $1 at the close Friday after an
abrupt change in direction last week. The stock appears to have
shed the effects of mediocre earnings and is now making a run at
the intermediate resistance area near $20. The company said a
variety of factors including non-recurring securities gains and
a lower income tax rate in the second quarter of 1998, together
with a reduction in net interest reduced their income for the
second quarter of 1999.

So the earnings report is old news but volatility and volume
both climbed last week as investors sold puts and bought calls.
One customer aggressively bought about 500 August $22 calls on
Friday and the specialist says the same account reappears on
the buy side whenever the stock begins rising and disappears
when the stock falters.

The chart is interesting and there is now an excellent disparity
in the front-month options. A unique bullish position exists for
those who like diagonal spreads.

PLAY (conservative - bullish/diagonal spreads):

BUY  CALL NOV-15 RNQ-KC OI=65  A=$6.87
SELL CALL AUG-20 RNQ-HD OI=418 B=$2.31

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


BNBN - Barnes&noble.com  $19.19   *** Conservative Speculation ***

BNBN is an online retailer of books and complementary information,
entertainment and intellectual property-based products. Since
launching its online business in May 1997, BNBN has become one of
the world's largest Web sites and is the fifth largest e-commerce
retailer. Focused largely on the sale of books & related products,
the company has capitalized on the recognized brand value of the
Barnes & Noble name to become the second-largest, and one of the
fastest growing, online distributors of books.

The big news is the new referral program and a partnership with
online recipe site Ucook.com. Under the new referral plan, the
company is asking its customers to embed a special link to the
site within their email. In return for the free link, customers
will receive a 5% commission on each purchase that comes from
the Web link. Barnesandnoble.com has struggled to overcome the
impression that it is playing catch-up to the e-commerce leader,
Amazon (AMZN). Despite being one of the Web's top e-commerce
sites in traffic and sales, BNBN always seems to follow in
Amazon's footsteps. This new program really makes e-commerce 
participation available to the public so "look out Amazon"!

BNBN isn't worried about the competition anymore, because they
are fast becoming the competition. A unique deep ITM position
exists for those who are bullish but extremely conservative.

PLAY (conservative - bullish/debit spread):

BUY  CALL AUG-12.50 BEU-HV OI=147 A=$7.00
SELL CALL AUG-17.50 BEU-HW OI=385 B=$2.75
INITIAL NET DEBIT TARGET=$4.12 ROI(max)=21% B/E=$16.62

And for those who are more aggressive.

PLAY (aggressive - bullish/debit spread):

BUY  CALL AUG-12.50 BEU-HV OI=147 A=$7.00
SELL CALL AUG-20.00 BEU-HD OI=944 B=$1.43
INITIAL NET DEBIT TARGET=$5.37 ROI(max)=39% B/E=$17.87

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


TA - Transamerica Corp.  $75.50     ** Aegon Merger ***

Transamerica is a financial services organization which engages
primarily through its subsidiaries in life insurance, commercial
lending, leasing and real estate services. Transamerica's life
insurance business is generated through lines of business which
include individual life insurance, asset management, structured
settlements, annuities, and reinsurance. Commercial lending is
provided by two core business units: distribution finance and
business credit. Transamerica Leasing leases, services and
manages containers, chassis and trailers throughout the world.

Transamerica, famous for its pyramid-shaped headquarters, is
being bought by AEGON NV (AEG) and recently shares in the Dutch
insurer have fallen significantly. Aegon now says its largely
share-funded deal to buy Transamerica is not under threat and
also said they might just re-negotiate if the stock price falls
further. The $9.7 billion transaction, most of it in stock, has
been structured around a pivot price of $95.20 with upper and
lower limits of $128.52 and $61.88.

It seems logical to assume that both companies still want the
transaction to occur and Aegon shares may be finding a bottom
near the $70 mark. If it can remain anywhere near that price
for the month of August, this play should expire profitably.

PLAY (very conservative - bullish/debit spread):

BUY  CALL AUG-60 TA-HL OI=162 A=$16.00
SELL CALL AUG-70 TA-HN OI=474 B=$6.87

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


PGR - Progressive Corp.  $143.13     *** Technicals Only ***

Progressive Auto Insurance is one of the nation's largest auto
insurers. In business since 1937, the company provides drivers
with competitive rates and innovative services designed to make
it easy to shop for, buy, and own their insurance policies.
Progressive provides policyholders with 24-hour services over
the phone, the Internet, and through 30,000 Independent Agents
in the United States. Progressive underwriters consistently
receive high ratings from A.M. Best, an independent firm that
rates the financial strength and performance of auto insurers.

Earnings are expected next week and some investors are hopeful
that a split will be announced. Others simply want a buyout or
merger agreement with one of the industry giants like Allstate,
Statefarm or Geico. In the case of either event, the stock price
would rocket but we don't foresee any surprises, just another
quarterly report. The current long-term, technical trend is
slightly bullish with an excellent support area near $135. If
the earnings are anything but horrendous, it should continue.

PLAY (conservative - bullish/debit spread):

BUY  CALL AUG-125 PGR-HE OI=31  A=$20.00
SELL CALL AUG-135 PGR-HG OI=296 B=$11.62
INITIAL NET DEBIT TARGET=$8.25 ROI(max)=21% B/E=$133.25

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


The Option Investor Newsletter            7-18-99
Sunday                6  of  7

Earnings Calendar Week of July 19yh

Day Symbol  Est. Company

Mon ATX      N/A  A.T. Cross Co.
Mon ALDA     N/A  Aldila Inc.
Mon AP       N/A  Ampco-Pittsburgh Corp.
Mon ARQL    -0.28 ArQule Inc.
Mon ARV      1.21 Arvin Industries Inc.
Mon AIC      0.37 Asset Investors
Mon BAC      1.14 Bank America Corporation
Mon BK       0.42 Bank of New York
Mon BDK      0.77 Black & Decker
Mon BRCD     N/A  Brocade Communications System
Mon BTLR     N/A  Butler Manufacturing Co.
Mon CNF      0.71 CNF Transportation
Mon CHFC     0.49 Chemical Financial Corp.
Mon CVAL     N/A  Chester Valley Bancorp. Inc.
Mon CAST     0.28 Citation Corporation
Mon C        0.64 Citigroup
Mon CBCF     0.52 Citizens Banking Corp.
Mon CTXS     0.31 Citrix Systems Inc.
Mon PAR      0.24 Coastcast
Mon COMR      0.4 Comair Holdings Inc.
Mon CNAF     N/A  Commercial Natl Fincl
Mon CQ       0.09 Comsat Corp.
Mon CFWY     0.29 Consolidated Freightways Corporation
Mon CAL      N/A  Continental Airlines Inc. - Class B
Mon CALa     N/A  Continental Airlines Inc.-Class A
Mon GLW      0.46 Corning Inc.
Mon SM       0.24 dana corp
Mon DLI      N/A  Del Laboratories
Mon DAL      2.29 Delta Airlines
Mon DP       0.37 Diagnostic Products
Mon D        0.61 Dominion Resources
Mon DCLK    -0.13 DoubleClick Inc.
Mon EGRP     -0.1 E*Trade Group Inc.
Mon ETN      1.56 Eaton Corp.
Mon FEIC     N/A  Fei Company
Mon FILE      0.1 FileNet Corp.
Mon FAF      0.59 First American Financial Corp.
Mon FSCO     0.35 First Security Corp.
Mon UNTD     0.32 First United Bancshares
Mon FISV     0.27 Fiserv Inc.
Mon FWRD     0.25 Forward Air Corp
Mon HRC      0.27 HEALTHSOUTH Corp.
Mon HBR      N/A  Harborside Healthcare Corp.
Mon HE       0.65 Hawaiian Electric Industries Inc.
Mon HTLD     0.29 Heartland Express
Mon HUBb     N/A  Hubbell Inc.
Mon IBM      0.88 IBM-International Business Machines
Mon IBP      0.66 IBP Inc.
Mon IPS      0.32 IPSCO
Mon ISSX     0.03 ISS Group
Mon IFMX     0.07 Informix Corp.
Mon INVX     0.18 Innovex Inc.
Mon IGR      N/A  Integra Inc.
Mon IMG      N/A  Intermagnetics General
Mon IGT      0.38 International Game Technology
Mon IVAC     -0.2 Intevac Inc.
Mon JEC      0.63 Jacobs Engineering Group Inc.
Mon JNC      0.69 John Nuveen & Co. - Class A
Mon KMET     0.09 KEMET Corp.
Mon KWIC     0.11 Kennedy-Wilson Inc.
Mon KSTN     0.51 Keystone Financial Inc.
Mon LSCC     0.52 Lattice Semiconductor Corp.
Mon LM       0.47 Legg Mason Inc.
Mon LHSP     N/A  Lernout & Hauspie Speech Products
Mon LXK      0.49 Lexmark International Group Inc.
Mon LMT     -0.13 Lockheed Martin
Mon LCE      0.91 Lone Star Industries
Mon MAFB     0.47 MAF Bancorp
Mon MCBC     N/A  Macataw Bank
Mon MNI      0.49 McClatchy Co.
Mon MBNY     N/A  Merchants New York Bancorp.
Mon MSFT     0.35 Microsoft Corporation
Mon MEH      0.86 Midwest Express Holdings
Mon MNES     N/A  Mines Safety Appliance
Mon JPM      2.14 Morgan JP Co. Inc.
Mon MOSX     N/A  Mosaix Inc.
Mon NBTB     0.38 NBT Bancorp.
Mon NNBR     0.12 NN Ball & Roller Inc.
Mon NB       N/A  Nationsbank Corp.(BankAmerica)
Mon NATR     0.29 Nature's Sunshine Products
Mon NJR      0.17 New Jersey Resources Corp.
Mon GAS      0.55 Nicor Inc.
Mon NTRS     0.85 Northern Trust Corporation
Mon OAK      0.47 Oak Industries Inc.
Mon PNC      0.98 PNC Financial Corp.
Mon PRIA    -0.17 PRI Automation Inc
Mon PPD      0.39 Pre-Paid Legal Services Inc.
Mon PRGX     0.21 Profit Recovery Group
Mon DGX      0.32 Quest Diagnostics
Mon NGH      N/A  RJR Nabisco Holdings Corp.
Mon RAL      0.27 Ralston Purina Co.
Mon RYN      0.55 Rayonier Inc.
Mon RBC       0.5 Regal-Beloit Corp.
Mon RGA      0.51 Reinsurance Group Amer
Mon RMDY     0.18 Remedy Corp.
Mon RSHX     N/A  Rockshox Inc.
Mon ROH      0.69 Rohm & Haas
Mon RAM      N/A  Royal Appliance Mfg
Mon RDK      0.25 Ruddick Corp.
Mon SCG      0.36 SCANA Corp.
Mon CKH      0.82 SEACOR Holdings Inc.
Mon SEIC     0.76 SEI Investments Company
Mon SCH      0.16 Schwab (Charles) Corp.
Mon SG       0.43 Scientific Games Holding Corp.
Mon VO      -0.46 Seagram Company Ltd.
Mon S        0.85 Sears Roebuck & Co.
Mon SKV      N/A  Sentry Technology Corporation
Mon SWD      0.29 Shorewood Packaging Corp.
Mon SEBL     0.21 Siebel Systems Inc.
Mon SKYT     0.06 SkyTel Communications
Mon SNA      0.65 Snap-On Incorporated
Mon SNC      0.31 Snyder Communications Inc.
Mon SODK     0.17 Sodak Gaming Inc.
Mon SJI     -0.35 South Jersey Industries Inc.
Mon SVRN     0.28 Sovereign Bancorp Inc.
Mon SAJ      N/A  St. Joseph Light & Power Co.
Mon STII     N/A  Stanford Telecommunications
Mon STTX     0.32 Steel Technologies Inc.
Mon SDRC     0.28 Structural Dynamics Research
Mon SLM      0.78 Student Loan Marketing Association
Mon SNB      0.16 Sunburst Hospitality Corp.
Mon SYB      0.31 Sybron International Corp.
Mon SYMC     0.44 Symantec Corporation
Mon TCB      0.48 TCF Financial Corp.
Mon TSCC     0.09 Technology Solutions Company
Mon TLAB      0.3 Tellabs Inc.
Mon TIN      0.64 Temple-Inland Inc.
Mon TRA      0.49 Terra Industries Inc.
Mon TWX      0.06 Time Warner Inc.
Mon TKR      0.17 Timken Company
Mon TOK      N/A  Tokheim Corp.
Mon TKTX    -0.55 Transkaryotic Therapies
Mon TMN      N/A  Transmedia Network Inc.
Mon TUP      0.44 Tupperware Corp.
Mon UBS     -0.05 U.S. Bioscience Inc.
Mon USG         2 USG Corp.
Mon USWB      0.1 USWeb
Mon UB       N/A  UnionBanCal Corp.
Mon UHS      0.71 Universal Health Services Inc.
Mon UVN      0.15 Univision Communications Inc.
Mon VALU     N/A  Value Line Inc.
Mon VANS     0.05 Vans Inc.
Mon VRC      0.14 Varco International Inc.
Mon VIA      0.08 Viacom Inc.
Mon VMC      0.66 Vulcan Materials Co.
Mon WNC      0.39 Wabash National Corp.
Mon WAVO     -0.2 WavePhone Inc
Mon WMK      N/A  Weis Markets Inc.

Tue NDN      0.27 99 Cents Only Stores
Tue ATHM    -0.02 @Home-At Home Corporation
Tue AD       0.59 ADVO Inc.
Tue AMFI     0.36 AMCORE Financial
Tue AMMB     0.29 AMRESCO Inc.
Tue ACXM     0.18 Acxiom Corp.
Tue AWA       0.9 America West Airlines
Tue ABFS     0.37 Arkansas Best Corp.
Tue ONE      0.93 Banc One Corporation
Tue BHW      0.45 Bell & Howell Company
Tue BCU     -0.15 Borden Chemical/Plastics LP
Tue BSX      0.26 Boston Scientific
Tue BRYO     0.05 Brio Technology
Tue BNI      0.54 Burlington North Santa Fe Corp.
Tue CORR    -0.43 COR Therapeutics Inc.
Tue CDN      0.21 Cadence Design Systems Inc.
Tue CBM      0.47 Cambrex Corp
Tue CAC      N/A  Camden National Corp.
Tue CNI      1.32 Canadian National Railway Company
Tue CSAR     0.47 Caraustar Industries Inc.
Tue CAFC     0.27 Carolina First Corporation
Tue CGC      0.01 Cascade Natural Gas
Tue CSE      0.49 Case Corporation
Tue PWN       0.1 Cash America International
Tue CSDS     N/A  Casino Data Systems
Tue CTN      N/A  Centennial Technologies Inc.
Tue CNT      0.71 CenterPoint Properties Corp.
Tue ECP      0.54 Central Newspapers Inc.
Tue CHKP     N/A  Check Point Software Technologies Ltd.
Tue CKP      0.17 Checkpoint Systems Inc.
Tue CSK      0.48 Chesapeake Corp.
Tue CLP      0.77 Colonial Properties Trust
Tue CCHM    -0.02 CombiChem
Tue CA       0.39 Computer Associates Inc.
Tue CHRZ     0.24 Computer Horizons Corp.
Tue CNG      0.39 Consolidated Natural Gas Co.
Tue CTB      0.47 Cooper Tire & Rubber Co.
Tue CVD      0.26 Covance Inc.
Tue DHI      0.64 D.R. Horton Inc
Tue DTL      0.25 Dal-Tile International Inc.
Tue DL       0.29 Dial Corporation (The)
Tue ETEK     0.14 E-Tek Dynamics
Tue EASCO    N/A  Easco Inc.
Tue ENC      N/A  Enesco Group
Tue EPTO     N/A  Epitope Inc.
Tue ATHM     N/A  Excite Inc.
Tue FCN      N/A  First Chicago NBD Corp.
Tue THFF     N/A  First Financial Corp. - Indians
Tue SRCE     0.44 First Sentinal Bancorp
Tue FTU      0.86 First Union Corporation
Tue FWBI     N/A  First Western Bancorp.
Tue FSH      N/A  Fisher Scientific International Inc.
Tue FLGS     0.81 Flagstar Bancorp.
Tue FLA      N/A  Florida East Coast Industries
Tue FRX      0.27 Forest Laboratories Inc.
Tue FCXa     N/A  Freeport McMoran Copper-CIass A
Tue FCX      0.09 Freeport McMoran Copper-CIass B
Tue FRIZ     N/A  Frisby Technologies
Tue FULT     0.35 Fulton Financial Corp.
Tue GEN      0.24 GenRad Inc.
Tue GD        0.8 General Dynamics
Tue GM       2.74 General Motors
Tue GMH     -0.24 General Motors - Class H
Tue GNI      N/A  Great Northern Iron Ore Properties
Tue GFF       0.2 Griffon Corporation
Tue HGGR     N/A  Haggar
Tue HCN      0.68 Health Care Reit Inc.
Tue HMA      0.16 Health Management Assoc.
Tue HELX      0.1 Helix Technology Corp.
Tue HXL      0.14 Hexcel Corporation
Tue HMS      0.14 Host Marriott Services
Tue HUF       0.5 Huffy Corp.
Tue HTCH    -0.15 Hutchinson Technology Inc.
Tue IBIS     0.03 IBIS Technolgy
Tue IEX      0.48 IDEX Corp.
Tue IMPH     0.28 IMPATH
Tue RX       0.17 IMS Health Inc.
Tue IIN      0.67 ITT Industries Inc.
Tue ITW      0.78 IllinoisTool Works Inc.
Tue IMNX     0.08 Immunex Corporation
Tue INFM     0.05 Infinium Software Inc.
Tue SEEK    -0.43 Infoseek Corp
Tue INOC     0.35 Innotrac
Tue ISIG     N/A  Insignia Insurance Systems
Tue INGR    -0.27 Intergraph Corp.
Tue IVC      N/A  Invacare Corp.
Tue IRWN     0.34 Irwin FinancialCorp.
Tue JSB      N/A  JSB Financial
Tue JKHY     0.38 Jack Henry & Associates Inc.
Tue JM       0.46 Johns Manville Corporation
Tue JNJ      0.82 Johnson & Johnson
Tue JNY      0.28 Jones Apparel Group Inc.
Tue KGC     -0.03 Kinross Gold Corp.
Tue KNGT     0.26 Knight Transportation
Tue KLIC    -0.08 Kulicke & Soffa
Tue LU       0.23 LUCENT Technologies Inc.
Tue LH       0.05 Laboratory Corp. Of America
Tue LDR      N/A  Landaver Inc.
Tue LEE       0.4 Lee Enterprises Inc.
Tue LNCR     0.42 Lincare Holdings Inc.
Tue LNC      0.75 Lincoln National Corp.
Tue MTMS     0.04 Made 2 Manage Systems
Tue MADGF    N/A  Madge Network
Tue MI        0.2 Marshall Industries Inc.
Tue MCRE        0 MetaCreations Inc
Tue MXT      N/A  Metris Companies
Tue MLNM        0 Millennium Pharmaceuticals Inc
Tue MIL      0.25 Millipore Corporation
Tue MPL      0.37 Minnesota Power
Tue NHI      0.75 National Health Investors
Tue NPL      N/A  National Propane Partners L.P.
Tue NEON    -0.18 New Era of Networks
Tue NWAC     0.98 Northwest Airlines - CIass A
Tue OXY     -0.05 Occidental Petroleum Corp.
Tue PX       0.64 PRAXAIR Inc.
Tue PTEC     0.03 Phoenix Technologies Ltd.
Tue PNW       0.7 Pinnacle West Capital Corp.
Tue PIOG    -0.08 Pioneer Group Inc.(The)
Tue PBI      0.57 Pitney-Bowes Inc.
Tue PFNC     0.25 Progress Financial Corp.
Tue PROX     0.15 Proxim Inc.
Tue KWR      0.42 Quaker Chemical Corp.
Tue QCOM     0.59 Qualcomm Inc.
Tue QMRK     0.01 Qualmark Corp.
Tue RTRSY    N/A  Reuters Holdings PLC
Tue RLM      0.47 Reynolds Metal Co.
Tue RHI      0.37 Robert Half International Inc.
Tue ROK      0.75 Rockwell International Corp.
Tue RSLN     0.34 Roslyn Bancorp Inc.
Tue STBA     0.37 S & T Bancorp.
Tue SBC      0.58 SBC Communications Inc.
Tue SCOC     0.11 Santa Cruz Operations Inc. (The)
Tue SGK      0.17 Schawk
Tue SGP      0.36 Schering-Plough Corp.
Tue SCHL      1.3 Scholastic Corp.
Tue SHW      0.62 Sherwin Williams Co.
Tue SBE      N/A  SmithKline Beecham PLC
Tue LUV      0.45 Southwest Airlines Company
Tue SMI      0.67 Springs Industries Inc.
Tue STFR     0.39 St. Francis Capital Corp.
Tue SCL      N/A  Stepan Co.
Tue SPH     -0.28 Suburban Propane Partners L.P.
Tue SUB      0.72 Summit Bancorp
Tue SUPC      0.3 Superior Consultant Holdings
Tue TCSI    -0.02 TCSI Corp.
Tue TJCO     0.51 TJ International Inc.
Tue TRW      1.05 TRW Inc.
Tue TYC      0.79 TYCO
Tue TANT     N/A  Tennant
Tue TER      0.38 Teradyne Inc.
Tue TXN      0.79 Texas Instruments Inc.
Tue TRBS     0.51 Texas Regional Bancshares
Tue TXU      0.39 Texas Utilities Co.
Tue TWI      0.11 Titan Wheel Int'l. Inc.
Tue TMK      N/A  Torchmark Corp.
Tue TNI      N/A  Transaction Network Services
Tue TQNT     0.23 TriQuint Semiconductor Inc.
Tue TSX      0.24 TriStar Aerospace
Tue YUM      0.59 Tricon Global Restaurants Inc.
Tue TRN      1.04 Trinity Industries Inc.
Tue TRST     0.34 Trustco Bank Corp NY
Tue USTB     0.43 UST Corp.
Tue UTX      0.82 United Technologies
Tue UM       N/A  Utah Medical Products Inc.
Tue WMS      0.11 WMS Industries Inc.
Tue WPS      0.42 WPS Resources Corp.
Tue WSFS     0.38 WSFS Financial Corp.
Tue WAMU     N/A  Washington Mutual Inc.
Tue WSO      0.38 Watsco Inc.
Tue WCBO     0.35 West Coast Bancorp
Tue WES      0.34 Westcorp Inc.
Tue XLNX     0.28 Xilinx Inc.

Wed AMR      1.68 AMR Corporation
Wed AOL      0.11 AOL-America Online Inc.
Wed ATMI     0.11 ATMI
Wed AANB     N/A  Abigail Adams Bancorp Inc.
Wed AKSY    -0.28 Aksys Ltd.
Wed AOG      N/A  Alberta Energy Company Ltd.
Wed ALL      0.79 Allstate Corporation
Wed AT       0.64 Alltel Corporation
Wed AMZN     -0.5 Amazon.com Inc.
Wed ASD      1.12 American Standard Companies Inc.
Wed ANLT     0.39 Analytical Surveys
Wed ACI     -0.01 Arch Coal Inc.
Wed AS       0.22 Armco Inc.
Wed ATML     0.13 Atmel Corp.
Wed AVP      0.46 Avon Products Inc.
Wed WHAL     N/A  Aware Inc.
Wed AZR      0.09 Aztar Corporation
Wed BSC      1.44 Bear Stearns Cos.
Wed BDX      0.37 Becton Dickinson & Co.
Wed BEL      0.75 Bell Atlantic Corporation
Wed BLS      0.46 BellSouth Corporation
Wed BMY      0.47 Bristol-Myers Squibb Co.
Wed BC       0.87 Brunswick Corp.
Wed BD       0.42 Budget Group Inc
Wed BR       0.09 Burlington Resources
Wed CCCG     0.13 CCC Information Services
Wed CDCO     N/A  CIDCO Inc.
Wed CMS      0.69 CMS Energy Corporation
Wed CAER     0.19 Caere Corp.
Wed CWT      0.29 California Water Services Group
Wed CP       0.36 Canadian Pacific Ltd.
Wed CTSI    -0.21 CardioThoracic Systems Inc
Wed CD       0.22 Cendant Corporation
Wed CENL     N/A  Centennial Technologies Inc.
Wed CSR      0.44 Central & Southwest Corp.
Wed CERN     0.01 Cerner Corp.
Wed CHB       0.6 Champion Enterprises Inc.
Wed COFI     0.55 Charter One Financial Inc.
Wed CMB      1.36 Chase Manhattan Corp.
Wed CQB      0.09 Chiquita Brands International Inc.
Wed CLF      1.04 Cleveland Cliffs Inc.
Wed CGNX     0.14 Cognex Corp.
Wed CL       0.34 Colgate Palmolive
Wed CTV      0.29 CommScope
Wed CPWR     0.21 Compuware Corp.
Wed CGR      0.19 Cooker Restaurant Corp.
Wed CACC     0.11 Credit Acceptance Corp.
Wed CW       N/A  Curtiss-Wright Corporation
Wed DHR      0.45 Danaher Corporation
Wed DLTK     0.22 Deltek Systems Inc.
Wed DEL      0.15 Deltic Timber Corp.
Wed DTPI     0.18 Diamond Technology Partners
Wed DLTR      0.2 Dollar Tree Stores Inc.
Wed DNB       0.4 Dunn & Bradstreet Corp.
Wed EWB      0.56 E. W. Blanch Holdings
Wed EGG      0.34 EG & G Inc.
Wed EMC      0.24 EMC Corp.
Wed EK       1.51 Eastman Kodak
Wed EDFY    -0.26 Edify Corp
Wed LLY      0.51 Eli Lilly & Co.
Wed ESCC    -0.03 Evans & Suthland Computer Corp.
Wed EVR      N/A  Everen Capital Corp.
Wed EXAR     0.11 Exar Corp.
Wed EXDS    -0.52 Exodus Communications
Wed XON      0.53 Exxon Corporation
Wed FNF      0.72 Fidelity National Financial Inc.
Wed FSA      1.04 Financial Security Assurance
Wed FR       0.81 First Industrial Realty Trust Inc.
Wed FMBI     0.61 First Midwest Bancorp Inc.
Wed FJ       0.63 Fort James Corp.
Wed FSI      0.34 Freedom Securities
Wed GSNX    -0.19 Gasonics Intl. Corp.
Wed GPU      0.69 General Public Utilities Corp.
Wed GPC      0.51 Genuine Parts
Wed GLE      0.33 Gleason Corp.
Wed GNET     N/A  Go2net Inc.
Wed GR       0.87 Goodrich B.F. Company (The)
Wed GT       0.46 Goodyear Tire & Rubber
Wed HCIA     0.06 HCIA
Wed HMTT    -0.23 HMT Technology Inc.
Wed MAH      0.22 Hanna (M. A.) Company
Wed HRBC     0.07 Harbinger Corp
Wed HLIT     0.13 Harmonic Lightwave Inc.
Wed HET      0.36 Harrah's Entertainment
Wed HDIE    -0.02 Healthdyne Information Enterprises Inc.
Wed HLT      0.24 Hilton Hotels
Wed HNI      0.37 Hon Industries
Wed HON      1.07 Honeywell Inc.
Wed ICOS     -0.3 ICOS Corp.
Wed IKOS     0.05 IKOS Systems Inc.
Wed NSPR     0.14 Inspire Insurance
Wed HIS      N/A  Integrated Health Services
Wed ITX      0.27 International Technology Corp.(IT Corp)
Wed JJSF     0.59 J & J Snack Foods
Wed JOS      1.11 Jostens Inc.
Wed JRC       0.3 Journal Register Corp.
Wed NITE     0.35 Knight/Trimark Group
Wed KNL       0.6 Knoll Inc.
Wed KOPN        0 Kopin Corp.
Wed KRON     0.38 Kronos Inc.
Wed LSI      0.18 LSI Logic Corp.
Wed LGTO     0.26 Legato Systems Inc.
Wed LBY      0.77 Libbey Inc.
Wed LIN      0.09 Linens 'n Things
Wed MXM      N/A  MAXXAM Inc.
Wed MOGN     N/A  MGI Pharmaceuticals Inc.
Wed MKSI     0.11 MKSInstruments
Wed MAIN     0.11 Main Street and Main Inc.
Wed MEA      0.52 Mead Corp.
Wed MEDQ     0.21 MedQuist Inc.
Wed MEDI    -0.22 Medimmune Inc.
Wed MEOH     N/A  Methanex Corp.
Wed MIKL     0.55 Michael Foods
Wed MPDI     0.11 Microwave Power Devices
Wed MNMD     0.16 Minimed Inc.
Wed MODI     0.74 Modine Manufacturing Co.
Wed MOLX     0.33 Molex Inc.
Wed MOLXA    0.33 Molex Inc. - Class A
Wed MCL      N/A  Moore Corp. Ltd.
Wed MUR      0.37 Murphy Oil Corp.
Wed NCR      0.44 NCR Corp.
Wed TEE       0.6 National Golf Properties
Wed NPTH    -0.25 NeoPath Inc.
Wed NETA    -1.05 Network Associates
Wed NPIX     N/A  Network Peripherals
Wed OAKT     N/A  Oak Technology
Wed OXE      0.34 Oec Medical Systems Inc
Wed OV       0.58 One Valley Bancorp.
Wed OMKT    -0.09 Open Market Inc.
Wed GOSHA    N/A  Oshkosh B'Gosh Inc. - Class A
Wed GOSHB    N/A  Oshkosh B'Gosh Inc. - Class B
Wed BOH      0.45 Pacific Century Financial Corp.
Wed PKOH     0.37 Park-Ohio Industries Inc.
Wed CHX      0.54 Pilgrim Pride
Wed PII      0.58 Polaris Industries Inc.
Wed PBKS     0.41 Provident Bankshares
Wed PNM      0.45 Public Service of New Mexico
Wed PRN      N/A  Puerto Rican Cement
Wed REY      0.39 Reynolds and Reynolds Co.
Wed R        0.45 Ryder Systems Inc.
Wed SON      0.46 Sonoco Products Co.
Wed SDW      1.55 Southdown Inc.
Wed SEHI     0.14 Southern Energy Homes
Wed SWK      0.53 Stanley Works
Wed SYKE     0.27 Stryker Corp.
Wed SYBS     0.08 Sybase Inc.
Wed TBC      0.18 Tasty Baking Co.
Wed TSG      0.56 The SABRE Group Holdings Inc.
Wed TMC      0.86 Times Mirror Company
Wed TWA     -0.11 Trans World Airlines Inc.
Wed TBI      N/A  Tuboscope Vetco International Corp.
Wed UAL      2.64 UAL Corporation
Wed ULTK     0.07 Ultrak Inc.
Wed UDI      0.66 United Dominion Industries
Wed VNTV    -0.06 Vantive Corporation (The)
Wed VVUS     0.02 Vivus Inc.
Wed WBST     0.59 Webster Financial Corp.
Wed WSBC     0.34 Wesbanco Inc.
Wed WDC     -0.95 Western Digital Corp.
Wed ZOLT    -0.04 Zoltek Companies Inc.
Wed ITWO     0.11 i2 Technologies Inc.

Thr ACX       0.4 ACX Technologies Inc.
Thr AES      0.43 AES Corporation (The)
Thr AFCX     0.56 AFC Cable Systems
Thr AZA      0.32 ALZA Corporation
Thr AR      -0.62 ASARCO
Thr ABDR     0.22 Abacus Direct Corp.
Thr ATVI    -0.19 Activision Inc.
Thr ADPT     0.39 Adaptec Inc.
Thr ACV      0.39 Alberto Culver Co.
Thr ALSC     0.04 Alliance Semiconductor Corp.
Thr ALRC     0.19 Alternative Resources Corporation
Thr AAG      0.47 American Annuity Group Inc.
Thr ABIG     N/A  American Bankers Insurance Group
Thr AIG      0.99 American International Group Inc.
Thr APCC     0.22 American Power Conversion Corp.
Thr AMGN     0.48 Amgen
Thr AMCT     0.37 Amresco Capital Trust
Thr AIV         1 Apartment Investment & Management
Thr AINN     N/A  Applied Innovations Inc.
Thr ARDT     N/A  Ardent Software
Thr ALV      0.47 Autoliv Inc.
Thr AVL      0.25 Aviall Inc
Thr AVID     0.24 Avid Technology Inc.
Thr BSBN     0.61 BSB Bancorp Inc.
Thr BANF     0.67 Banc First Corp.
Thr BAX      0.69 Baxter International Inc.
Thr BELM     0.22 Bell Microproducts Inc.
Thr BVSN     0.11 BroadVision
Thr BPL      0.69 Buckeye Partners L.P.
Thr BMHC     0.47 Building Materials Holding Corp.
Thr BSH      0.16 Bush Industries
Thr CIT      0.58 CITGroup
Thr CSX      0.46 CSX Corporation
Thr COG     -0.06 Cabot Oil & Gas 'A'
Thr CCC      0.07 Calgon Carbon Corp.
Thr CLBR    -0.51 Caliber Learning Network
Thr CPL      0.49 Carolina Power & Light Co.
Thr CVH      0.24 Cavanaughs Hospitality
Thr CNDS    -0.96 Cell Net Data Systems Inc.
Thr CTX      0.91 Centex Corporation
Thr CNDX     N/A  Centocor Diagnostics
Thr CEM      0.28 ChemFirst Inc.
Thr CHE      N/A  Chemed Corp.
Thr CIN      0.41 Cincinnati Gas and Electric(Cinergy)
Thr CLFY     0.13 Clarify Inc.
Thr CGP      0.45 Coastal Corp.
Thr CES      N/A  Commonwealth Energy Systems
Thr CMIN     0.34 Commonwealth Industries Inc.
Thr CNMD     0.43 Conmed Corp.
Thr RON      N/A  Cooper Cameron Corp.
Thr CBE       0.9 Cooper Industries lnc.
Thr RKY      N/A  Coors (Adolph) Company - Class B
Thr CWLZ     N/A  Cowlitz Bancorporation
Thr XTO      0.01 Cross Timbers Oil
Thr XRAY     0.41 DENTSPLY International Inc.
Thr DST      0.47 DST Systems
Thr DGN     -0.12 Data General
Thr DPL      0.25 Dayton Power & Light
Thr DDC      0.51 Detroit Diesel Corp.
Thr DIMD     0.01 Diamond Multimedia Sys. Inc.
Thr DGII     0.09 Digi International
Thr DCTM    -0.17 Documentum Inc
Thr DON      0.54 Donnelly Corp.
Thr DUK      0.76 Duke Energy Co.
Thr ECL      0.32 Ecolab Inc.
Thr EPG      0.47 El Paso Natural Gas Company
Thr EGLS    -0.19 Electroglas Inc.
Thr EC       0.36 Engelhard Corporation
Thr ETR      0.75 Entergy Corporation
Thr SXC      N/A  Essex International
Thr FIC      0.52 Fair Isaac & Company Inc.
Thr FDC       0.4 First Data Corp.
Thr FOM      0.58 Foremost Corporation of America
Thr FRTE    -0.06 Forte Software Inc.
Thr GTW      0.55 Gateway 2000 Inc.
Thr GENZ     0.43 Genzyme Corporation
Thr GZTR     N/A  Genzyme Tissue Repair Div.
Thr GHCI     N/A  Giant Cement Holdings
Thr HAL      0.17 Halliburton Co.
Thr HRD      0.59 Hannaford Brothers
Thr HPRT    -0.29 Heartport, Inc.
Thr HLYW     0.19 Hollywood Entertainment Corp.
Thr HI       0.68 Household International Inc.
Thr HYSL     0.13 Hyperion Solutions Corp.
Thr IDPH     0.57 IDEC Pharmaceuticals Inc.
Thr IDXC    -0.03 IDX Systems Corp.
Thr IMO      0.17 Imperial Oil Limited
Thr IR       0.98 Ingersoll-Rand Company
Thr INHL    -0.35 Inhale Therapeutic Systems
Thr IFF      0.48 International Flavors & Fragrances Inc.
Thr JDAS     0.02 JDA Software Group
Thr KMB      0.69 Kimberly-Clark
Thr KEX      0.33 Kirby Corp.
Thr KRI      0.82 Knight-Ridder Inc.
Thr KMAG    -0.72 Komag Inc.
Thr LLL      0.31 L-3 Communication Holdings
Thr LAF      1.24 Lafarge Corp.
Thr LNCE     0.25 Lance Inc.
Thr LEG      0.37 Leggett & Platt Inc.
Thr LLTC     0.33 Linear Technology Corp.
Thr LPX      0.59 Louisiana-Pacific
Thr LZ        0.5 Lubrizol Corp.
Thr LDL      0.22 Lydall Inc
Thr MDU      0.33 MDU Resources Group Inc.
Thr MWL      0.27 Mail-Well Inc.
Thr MAN       0.4 Manpower Inc.
Thr MHC      0.53 Manufactured Home Communities
Thr MRL     -0.11 Marine Drilling Companies Inc.
Thr MTSN    -0.02 Mattson Technology Inc.
Thr MCD      0.37 McDonalds Corp.
Thr MEDA    -0.16 Medaphis Corp.
Thr MEL      0.45 Mellon Bank Corporation
Thr KITS     0.12 Meridian Diagnostics Inc.
Thr MCRL     0.36 Micrel Inc.
Thr MLIN    -0.01 Micro Linear Corp
Thr MAK      0.34 Mohawk Industries Inc.
Thr MTC      0.44 Monsanto Co.
Thr MPO      0.32 MotivePower Ind
Thr NSH      N/A  Nashua Corporation
Thr NATI     0.32 National Instruments Corporation
Thr NSOL     0.16 Network Solutions
Thr NES      0.54 New England Electric System
Thr NFX      0.09 Newfield Exploration Company
Thr NHL      0.71 Newhall Land & Farming Co.
Thr NE       0.15 Noble Drilling Corporation
Thr OMP      0.57 OM Group Inc.
Thr OLDB     0.44 Old National Bancorp. Indiana
Thr ZEUS      0.2 Olympic Steel Inc.
Thr OMC      0.58 Omnicom Group Inc.
Thr PMWI    -0.66 Pagemart Wireless
Thr PPDI     0.26 Pharmaceutical Product Development
Thr PRY      0.37 Pittway Corp.
Thr POT      0.96 Potash Corp. of Saskatchewan
Thr PHCC      0.2 Priority Healthcare
Thr PVN      0.85 Providian Financial Corporation
Thr PGS       0.1 Public Service of North Carolina Inc.
Thr PSD      0.22 Puget Sound Energy Inc.
Thr OAT      0.85 Quaker Oats Co.
Thr QNTM     0.11 Quantum Corp.
Thr QTRN     0.33 Quintiles Transnational Corp.
Thr RSYS     0.28 Radisys Corp.
Thr RAIN     0.16 Rainforest Cafe Inc.
Thr RTN      N/A  Raytheon Co.
Thr RBK      0.12 Reebok International Ltd.
Thr RELY     0.58 Reliance Bancorp Inc.
Thr RS       0.69 Reliance Steel & Aluminum
Thr RGS       0.4 Rochester Gas and Electric Corporation
Thr RCCK        0 Rock Financial
Thr RYL      0.93 Ryland Corporation
Thr SAPE     0.25 Sapient
Thr SLB      0.25 Schlumberger Ltd.
Thr SPP      N/A  Scott Paper Company
Thr SQNT     0.06 Sequent Computer Systems Inc.
Thr SIAL     0.44 Sigma-Aldrich Corporation
Thr SLGN     0.53 Silgan Holdings
Thr SIPX     0.15 Sipex Corporation
Thr SII     -0.04 Smith International Inc.
Thr SNT      0.31 Sonat Inc.
Thr PCU      0.04 Southern Peru Copper Corp
Thr FON      0.45 Sprint Corp.
Thr PCS     -1.28 Sprint PCS
Thr STJ      0.43 St. Jude Medical Inc.
Thr SMAN     N/A  Standard Management Corp.
Thr SR        0.6 Standard Register Company
Thr SUGN     N/A  Sugen Inc.
Thr SUN      0.39 Sun Co Inc.(Sunoco)
Thr SUI      0.73 Sun Communities
Thr SUNW     0.46 Sun Microsystems Inc.
Thr SLVN      0.2 Sylvan Learning Systems Inc.
Thr SYMM     N/A  Symmetricom Inc.
Thr SNPS     0.64 Synopsys Inc.
Thr TAN      0.28 Tandy Corp.
Thr TTEC     0.09 TeleTech Holdings Inc.
Thr TTI     -0.09 Tetra Technologies Inc.
Thr TXT      1.03 Textron Inc.
Thr TOS      0.49 Tosco Corporation
Thr TSCO     1.22 Tractor Supply Co.
Thr TRH      1.36 TransAtlantic Holdings Inc.
Thr TSAI     0.36 Transaction Systems Architects
Thr TA          1 Transamerica
Thr TRMB     N/A  Trimble Navigation Ltd.
Thr TW       0.36 Twentieth Century Insurance
Thr UCR      0.54 UCAR International Inc.
Thr UNA      0.06 UNOVA
Thr MRO      0.37 USX-Marathon Group
Thr UTEK    -0.08 Ultratech Stepper Inc.
Thr UFI      0.21 Unifi Inc.
Thr UNP      0.72 Union Pacific Corp.
Thr UAM      0.23 United Asset Management
Thr VCAI     0.32 Veterinary Centers of America Inc.
Thr VVI      0.39 Viad Corp.
Thr WLA      0.51 Warner-Lambert Company
Thr WFT      0.01 Weatherford International
Thr WS      -0.22 Weirton Steel Corp.
Thr WST      0.66 West Company (The)
Thr WPSN     0.32 WestPoint Stevens Inc.
Thr WSTL    -0.12 Westell Technologies Inc.
Thr WDHD      0.2 Woodhead Corp.
Thr XRIT     0.15 X-Rite Inc.
Thr XRX      0.62 Xerox Corp.
Thr XICO     N/A  Xicor Corp.
Thr ZION     0.66 Zions Bancorporation

Fri APD      0.56 Air Products and Chemicals Inc.
Fri AIN      0.32 Albany International Corp.
Fri ADRX     0.21 Andrx Corp.
Fri MED      N/A  Atrion Corp.
Fri BMG     -0.04 Battle Mountain Gold Company
Fri BMS      0.56 Bemis Co. Inc.
Fri CCJ      N/A  Cameco Corp.
Fri CMO      0.14 Capstead Mortgage
Fri CGI      0.51 Commerce Group
Fri DOW      1.65 Dow Chemical
Fri EMN      0.49 Eastman Chemical Co.
Fri NEG      0.27 Energy East Corp.
Fri ENN      0.48 Equity Inns Inc.
Fri FWWB      0.4 First Washington Bancorp Inc
Fri FO       0.58 Fortune Brands Inc.
Fri FTL      0.03 Fruit Of The Loom Inc.
Fri JJSC     N/A  Jefferson Smurfit Corp.
Fri JH       0.29 John H. Harland Co.
Fri KSWS     0.54 K Swiss Inc. - Class A
Fri KDN      0.55 Kaydon Corp.
Fri KFBI     0.32 Klamath First Bancorp.
Fri LHSG     N/A  LTS Group
Fri LTV     -0.14 LTV Corp.
Fri MRK      0.61 Merck & Co.
Fri WPO      6.44 Washington Post Co.

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            7-18-99
Sunday                7  of  7


Another Great Month...

With equity markets trading near all-time-highs, many leading
brokerages are now recommending conservative trading strategies,
such as covered-calls, as a profitable method to diversify a
successful portfolio. The Option Investor Newsletter is proud of
their outstanding performance in this category.

In the month of July, the Covered-Calls section had 35 profitable
positions out of 38 potential candidates. This might appear to be
an outstanding, one-time performance until you look at our past
record of success. This section historically returns 4%-8% monthly
in over 80% of the plays provided regardless of market conditions!
There is no magic involved, just lots of hard work and extensive
research. Our experienced and dedicated staff selects technically
favorable stocks with over-valued, in-the-money, option premiums
to produce consistent, monthly returns.

The top plays for the month were Security Dynamics (SDTI) with a
21% return and Diamond Multimedia Systems (DIMD) at a 14% return.
Positions with 30-day returns of 10% or better included:  Marine
Drilling Co. (MRL), IBM take-over target Sequent Computer Systems
(SQNT), and Global Imaging Systems (GISX). Our average return this
month was well above the 5% target and we had several issues that
exceeded this goal including the following above 9%: NMSS, VVTV,
FIBR; above 8%: NETG, FFD, SQNT; and long list of issues from 5%

For August, the portfolio is in great shape; currently at a 100%
success rate, and we will work hard to maintain our outstanding
record in the coming months.

Good Luck!
Stock  Price  Last    Mon  Strike  Opt    Profit   ROI   Monthly
Sym    Picked Price        Price   Bid    /Loss          ROI

SDTI   22.56  20.75   Jul  20.00  3.50  *$  0.94   4.9%  21.4%
DIMD    5.06   5.22   Jul   5.00  0.63  *$  0.57  12.9%  14.0%
MRL    13.50  14.25   Jul  12.50  1.63  *$  0.63   5.3%  11.5%
SQNT   13.75  17.31   Jul  12.50  2.38  *$  1.13   9.9%  10.8%
GISX   18.25  21.13   Jul  17.50  1.88  *$  1.13   6.9%  10.0%
NMSS    8.13  12.63   Jul   7.50  1.38  *$  0.75  11.1%   9.7%
VVTV   19.00  26.63   Jul  17.50  2.56  *$  1.06   6.4%   9.3%
FIBR   14.00  13.44   Jul  12.50  2.00  *$  0.50   4.2%   9.1%
NETG   25.25  27.00   Jul  22.50  3.63  *$  0.88   4.1%   8.8%
FFD    16.38  16.00   Jul  15.00  2.50  *$  1.12   8.1%   8.8%
SQNT   16.94  17.31   Jul  15.00  2.50  *$  0.56   3.9%   8.4%
PRGN   26.38  26.75   Jul  25.00  2.25  *$  0.87   3.6%   7.8%
FIBR   12.63  13.44   Jul  10.00  3.25  *$  0.62   6.6%   7.2%
SAVLY  15.75  14.38   Jul  12.50  4.00  *$  0.75   6.4%   6.9%
TKLC   12.06  11.56   Jul  10.00  2.75  *$  0.69   7.4%   6.4%
ENZN   16.88  23.25   Jul  15.00  2.50  *$  0.62   4.3%   6.2%
PERI   15.13  22.38   Jul  12.50  3.13  *$  0.50   4.2%   6.0%
LWIN   20.06  19.38   Jul  17.50  3.25  *$  0.69   4.1%   5.9%
PRGN   24.75  26.75   Jul  22.50  3.13  *$  0.88   4.1%   5.9%
CAST   15.94  16.19   Jul  15.00  1.88  *$  0.94   6.7%   5.8%
SKYC   17.06  20.94   Jul  15.00  2.63  *$  0.57   4.0%   5.7%
PILL   13.88  15.56   Jul  12.50  2.13  *$  0.75   6.4%   5.5%
KMET   20.88  24.22   Jul  20.00  2.06  *$  1.18   6.3%   5.4%
AVIR   22.75  25.69   Jul  20.00  4.13  *$  1.38   7.4%   5.4%
GSTX   14.00  15.75   Jul  12.50  1.94  *$  0.44   3.6%   5.3%
AAC     7.69   8.06   Jul   7.50  0.69  *$  0.50   7.1%   5.2%
NSM    25.00  28.50   Jul  22.50  3.25  *$  0.75   3.4%   5.0%
CBTSY  16.50  23.75   Jul  15.00  2.44  *$  0.94   6.7%   4.8%
CPU     8.38   7.38   Jul   7.50  1.44   $  0.44   6.3%   4.6%
ARTT   14.69  14.00   Jul  12.50  2.75  *$  0.56   4.7%   4.1%
THNK   17.19  13.75   Jul  12.50  5.13  *$  0.44   3.6%   4.0%
DUSA    9.75  12.25   Jul   7.50  2.56  *$  0.31   4.3%   3.7%
AMES   47.50  43.13   Jul  45.00  4.75   $  0.38   0.9%   1.0%
THNK   17.19  13.75   Jul  15.00  3.25   $ -0.19  -1.4%   0.0%
SNRS   13.06  16.56   Aug  10.00  4.38  *$  1.32  15.2%   9.4%
FRTE   11.63  12.19   Aug  10.00  2.75  *$  1.12  12.6%   7.8%
SQNT   17.50  17.31   Aug  15.00  3.88  *$  1.38  10.1%   7.3%
BNBN   19.25  19.19   Aug  17.50  3.13  *$  1.38   8.6%   6.2%
PAMC   33.69  34.00   Aug  25.00 10.63  *$  1.94   8.4%   6.1%
MESG   19.75  22.19   Aug  15.00  5.88  *$  1.13   8.1%   5.9%
LIPO   20.88  20.88   Aug  20.00  2.38  *$  1.50   8.1%   5.9%
WSTL    8.97   9.00   Aug   7.50  2.00  *$  0.53   7.6%   5.5%
IRF    13.19  13.06   Aug  12.50  1.63  *$  0.94   8.1%   5.0%
DGN    17.81  15.75   Aug  15.00  3.50  *$  0.69   4.8%   3.5%

July Plays Previously Closed:

*    NOVT - ended up a winner (Murphy's Law) 
*    VLNC - ended just above break-even
*    PTEK - holding above $10.00 support
*    CYOE - ouch, a reason to close when breaking support.

July Plays that were not playable (but profitable):

*    MCOM - a big mover, 3 day - $30 run!

-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).
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

ATVI   15.50  Aug 15.00  AQV HC  1.44  1933  14.06   6.7%   6.7%
CCCG   12.88  Aug 12.50  KDQ HV  1.19  0     11.69   6.9%   6.9%
CIEN   37.13  Aug 35.00  EUQ HG  4.38  3300  32.75   6.9%   6.9%
COOL   12.63  Aug 10.00  QOO HB  3.13  419    9.50   5.3%   5.3%
CS     14.81  Aug 12.50   CS HV  3.00  2757  11.81   5.8%   5.8%
IDTC   22.50  Aug 17.50  IQJ HW  5.88  88    16.62   5.3%   5.3%
MESG   22.38  Aug 17.50  MUG HW  5.88  378   16.50   6.1%   6.1%
NPIX   19.13  Aug 15.00  XMQ HC  4.75  106   14.38   4.3%   4.3%
RRRR   11.81  Aug 10.00  RRU HB  2.50  74     9.31   7.4%   7.4%
UBET   12.38  Aug 10.00  BUB HB  3.00  81     9.38   6.6%   6.6%
Sequenced by Return Called 
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC     RNC
Sym               Price  Symbol  Bid   Intr  Basis

RRRR   11.81  Aug 10.00  RRU HB  2.50  74     9.31   7.4%   7.4%
CCCG   12.88  Aug 12.50  KDQ HV  1.19  0     11.69   6.9%   6.9%
CIEN   37.13  Aug 35.00  EUQ HG  4.38  3300  32.75   6.9%   6.9%
ATVI   15.50  Aug 15.00  AQV HC  1.44  1933  14.06   6.7%   6.7%
UBET   12.38  Aug 10.00  BUB HB  3.00  81     9.38   6.6%   6.6%
MESG   22.38  Aug 17.50  MUG HW  5.88  378   16.50   6.1%   6.1%
CS     14.81  Aug 12.50   CS HV  3.00  2757  11.81   5.8%   5.8%
IDTC   22.50  Aug 17.50  IQJ HW  5.88  88    16.62   5.3%   5.3%
COOL   12.63  Aug 10.00  QOO HB  3.13  419    9.50   5.3%   5.3%
NPIX   19.13  Aug 15.00  XMQ HC  4.75  106   14.38   4.3%   4.3%
Company Descriptions
ATVI - Activision, Inc. $15.50   *** Quake II ***

Activision, Inc. is an international publisher, developer and 
distributor of interactive entertainment and leisure software, 
including action, adventure, strategy and simulation products. 
They make game software for the Sony Playstation, Nintendo 64,
and computers; the recently released Quake II. The stock has
broke-out above its recent trading range and looks ready to
move. Earnings are expected this week.

Aug 15.00 AQV HC Bid=1.44 OI=1933 CB=14.06 RC=6.7% RNC=6.7%

Chart = http://quote.yahoo.com/q?s=atvi&d=3m
CCCG - CCC Information Services $12.88   *** Stage I base ***

CCC Information is the leading provider of technology-based 
business solutions for automotive claims. These solutions, 
comprising information, advanced software, communications and 
total claims outsourcing services, empower CCC's clients to 
compete more effectively by improving and streamlining their 
business processes. On Tuesday, CCC introduced a new Internet
based service, Pathways Image Library. Technically in a lateral
(can you say flat-line) consolidation. Earnings are expected
this week.

Aug 12.50 KDQ HV Bid=1.19 OI=0 CB=11.69 RC=6.9% RNC=6.9%

Chart = http://quote.yahoo.com/q?s=cccg&d=3m
CIEN - Ciena Corporation $37.13      *** Stage II ***

CIENA's market leading optical networking systems form the core
of telecommunications networks worldwide. Ciena's networking
solutions utilize bandwidth expanding dense wavelength division
multiplexing (DWDM) technology for long-haul, short-haul and
metropolitan applications. Ciena was upgraded at the end of June
and recently completed its purchase of privately held Omnia 
Communications. Technically in a Stage II climb and a hot sector.

Aug 35.00 EUQ HG Bid=4.38 OI=3300 CB=32.75 RC=6.9% RNC=6.9%

Chart = http://quote.yahoo.com/q?s=cien&d=3m
COOL - Cyberian Outpost, Inc.  $12.63   *** Next Merger? ***

Cyberian Outpost is a global Internet retailer of computer 
hardware, software and accessories to consumers and small
businesses. Cyberian's online store offers more than 160,000 
products and has recently started selling IBM's Aptiva and 
Thinkpad product lines. Cyberian found a bottom near our cost
basis and moved up sharply with the IBM deal. Add a touch of 
merger speculation (EGGS/ONSL - who will be next!) and you 
have the recipe for a great over-valued ITM call.

Aug 10.00 QOO HB Bid=3.13 OI=419 CB=9.50 RC=5.3% RNC=5.3%

Chart = http://quote.yahoo.com/q?s=cool&d=3m
CS - Cabletron Systems, Inc.  $14.81       *** Take-over? ***

CS provides high-performance networking solutions and delivers 
dependable network access and communications through its scaleable
products designed for enterprise networks and service providers.
Cabletron jumped after Business Week reported that several 
investment professionals believed a global telecom giant might be
interested in owning CS ($20 a share was quoted). CS has moved up
sharply and may now test the June high.

Aug 12.50 CS HV Bid=3.00 OI=2757 CB=11.81 RC=5.8% RNC=5.8%

Chart = http://quote.yahoo.com/q?s=cs&d=3m
IDTC - IDT Corporation  $22.50   *** Net2Phone IPO ***

IDT Corporation is a telecommunications company which offers a 
broad range of integrated long-distance telephone and Internet 
access services.  IDT's Net2Phone (telephone calls through the 
Internet) is expected to price next week between $10 and $12. 
IDT already has distribution deals with Compaq & Snap and expects
to integrate Net2Phone throughout the PC world. Sprint is also
rumored to be eyeing IDT for a possible take-over.

Aug 17.50 IQJ HW Bid=5.88 OI=88 CB=16.62 RC=5.3% RNC=5.3%

Chart = http://quote.yahoo.com/q?s=idtc&d=3m
MESG - MessageMedia Inc.  $22.38   *** New High ***

MESG is a services company which provides e-mail based customer 
relationship management and direct marketing services, which 
enables companies to integrate sales and marketing functions into 
e-mail messages to their customers. MessageMedia started moving 
in June after announcing plans to acquire closely-held Revnet 
Systems (to gain e-mail database-software technology) and Decisive 
Technology (provider of continuous customer feedback solutions).
Closed at a new high on Friday!

Aug 17.50 MUG HW Bid=5.88 OI=378 CB=16.50 RC=6.1% RNC=6.1%

Chart = http://quote.yahoo.com/q?s=mesg&d=3m
NPIX - Network Peripherals, Inc. $19.13   *** Conservative ***

NPI designs and manufactures high performance network products 
including Layer2/Layer3 NuWave Architecture Gigabit Ethernet and
FDDI switches, concentrator hubs, network adapters, application 
specific integrated circuits, and network management software.
This is a conservative play that offers a high probability of a 
low return - about 3.5% monthly. Using margin effectively doubles
the return. The chart is bullish and a technical support area 
exists at the strike price.

Aug 15.00 XMQ HC Bid=4.75 OI=106 CB=14.38 RC=4.3% RNC=4.3%

Chart = http://quote.yahoo.com/q?s=npix&d=3m
RRRR - Rare Medium Group, Inc. $11.81 

Rare Medium Group is an Internet business services firm, helping
clients develop Internet strategies, improve business processes
and develop interactive content using Internet-based technologies.
Rare Medium recently launched ChangeMusic.com Network, whose four
sites make it the top digital music destination on the web. RRRR 
was added to the Russell 2000/3000 on Monday. The stock is in a
lateral consolidation with several bullish indicators and a cost
basis at the 150 dma makes this a favorable entry point.

Aug 10.00 RRU HB Bid=2.50 OI=74 CB=9.31 RC=7.4% RNC=7.4%

Chart = http://quote.yahoo.com/q?s=rrrr&d=3m
UBET - Youbet.com, Inc. $12.38   *** At the Races! ***

Youbet.com has a proven track record in both the computer and 
horse racing industries, with critical proprietary technology 
and experience in online services, transaction processing, 
simulcasting, and interactive entertainment.  You Bet developed 
and deployed the world's first PC-based totalisator - a computer 
system currently in use worldwide to operate all forms of wagering 
at racetracks. Youbet has recently been upgraded and now offers
racing from Australia, where more than 50 race tracks offer year
round turf racing. A speculative play on a business whose very 
nature is, well, speculative!

Aug 10.00 BUB HB Bid=3.00 OI=81 CB=9.38 RC=6.6% RNC=6.6%

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

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 

Stock Price Month Strike Symbol Price PctRtn OpnInt 

SNRS  16.56  Aug  17.50  RNUHW  2.75 16.60 1155
IRID   7.38  Aug   7.50  QAKHU  1.13 15.25 3516
IDTC  22.44  Aug  22.50  IQJHX  3.00 13.37  850
TIE   12.00  Aug  12.50  TIEHV  1.50 12.50  957
DDIM   4.13  Aug   5.00   QMHA  0.50 12.12  671
SNRS  16.56  Aug  20.00  RNUHD  2.00 12.08 4513
NAVR   9.94  Aug  10.00  QHQHB  1.19 11.95  359
PTVL  23.06  Aug  25.00  QUTHE  2.75 11.92 2388
PSSI  11.94  Aug  12.50  PYQHV  1.38 11.52 1082
TLXN  10.00  Aug  10.00  TNQHB  1.13 11.25  230
PERI  22.38  Aug  22.50  HQSHX  2.50 11.17  103
KERA  19.00  Aug  20.00  KVQHD  2.06 10.86  438
QMDC   9.31  Aug  10.00  QCDHB  1.00 10.74 1542
ICA    4.69  Aug   5.00  ICAHA  0.50 10.67    2
PAX   12.38  Aug  12.50  PAXHV  1.31 10.61  207
CS    14.81  Aug  15.00   CSHC  1.56 10.55 4458
CMTO  19.63  Aug  20.00  CQHHD  2.06 10.51  495
BYND  27.97  Aug  30.00  QYDHF  2.94 10.50  980
WORK  14.94  Aug  15.00  WUKHC  1.56 10.46  654
BEAM  19.94  Aug  20.00  BAQHD  2.06 10.34  824
NETA  19.94  Aug  20.00  CQMHD  2.06 10.34 5356
SATH   9.75  Aug  10.00  SQRHB  1.00 10.26 1384
OMKT  14.94  Aug  15.00  OQMHC  1.50 10.04 4067
GLFD  16.25  Aug  17.50  GQFHW  1.63 10.00  153
NVX    7.19  Sep   7.50  NVXIU  1.31 18.26  299
IDTC  22.44  Sep  22.50  IQJIX  4.00 17.83  279
CEGE   4.94  Sep   5.00  QIIIA  0.88 17.72  287
PAX   12.38  Sep  12.50  PAXIV  2.19 17.68  662
MEDA   4.63  Sep   5.00  MQAIA  0.81 17.57 1526
IONA  17.00  Sep  17.50  YWQIW  2.94 17.28   68
LOJN  10.88  Sep  12.50  LQJIV  1.81 16.67  366
MCHM   6.81  Sep   7.50   QQIU  1.13 16.51  236
NCDI   5.00  Sep   5.00  NQKIA  0.81 16.25  273
NCDI   5.00  Sep   7.50  NQKIU  0.81 16.25  139
TLXN  10.00  Sep  10.00  TNQIB  1.63 16.25  201
SKYC  20.94  Sep  22.50  KQFIX  3.38 16.12   22
NUS   19.31  Sep  20.00  NUSID  3.00 15.53  370
ASPT  11.38  Sep  12.50  ATQIV  1.75 15.38  648
NETA  19.94  Sep  20.00  CQMID  3.00 15.05 3476
IDTC  22.44  Sep  25.00  IQJIE  3.38 15.04  636
GHV    3.75  Sep   5.00  GHVIA  0.56 15.00 1032
DUSA  12.25  Sep  12.50  QDUIV  1.81 14.80  127
BEAM  19.94  Sep  20.00  BAQID  2.94 14.73 1435
HCIA  10.25  Sep  12.50  ZHQIV  1.50 14.63  202
SNC   30.00  Sep  30.00  SNCIF  4.38 14.58 1721
ROSI   6.91  Sep   7.50  QRSIU  1.00 14.48  414
AVL   16.63  Sep  17.50  AVLIW  2.38 14.29  190
PCYC  28.00  Sep  30.00  QPYIF  4.00 14.29   46
MATK   9.25  Sep  10.00  KQTIB  1.31 14.19  110
VNTV   9.69  Sep  12.50  QTZIV  1.38 14.19  194
EAII  24.75  Sep  25.00  QNEIE  3.50 14.14  218
PPRT   6.19  Sep   7.50  QPNIU  0.88 14.14  326
ZDZ   24.81  Sep  25.00  ZDZIE  3.50 14.11  352
BYND  27.97  Sep  30.00  QYDIF  3.88 13.85 1274
ABTE  12.19  Sep  12.50  QZBIV  1.69 13.85  388
PAGE   5.94  Sep   7.50  PGQIU  0.81 13.68 3721
COB    7.31  Sep   7.50  COBIU  1.00 13.67  480
TDFX  16.13  Sep  17.50   FQIW  2.19 13.57  437
BTIM  14.50  Sep  15.00  QBOIC  1.94 13.36  516
IHS    5.63  Sep   7.50  IHSIU  0.75 13.33  834
KMAG   3.75  Sep   5.00  KMQIA  0.50 13.33  995
RCII  23.50  Sep  25.00  RQGIE  3.13 13.30    1
BEV    6.63  Sep   7.50  BEVIU  0.88 13.21 6277
GLIA  20.81  Sep  22.50  QGLIX  2.75 13.21  161
MXWL  24.63  Sep  25.00  QMWIE  3.25 13.20   27
ONSL  18.94  Sep  20.00  QOLID  2.50 13.20  177
SVGI  16.13  Sep  17.50  VQQIW  2.13 13.18  513
AGTX  12.44  Sep  12.50  QDXIV  1.63 13.07  115
WERN  19.50  Sep  20.00  WQXID  2.50 12.82   38
CNDS   9.31  Sep  10.00  KQNIB  1.19 12.75 1661
CERN  19.63  Sep  20.00  CQNID  2.50 12.74  235
GLFD  16.25  Sep  17.50  GQFIW  2.06 12.69   74
GOSHA 18.31  Sep  20.00  QOKID  2.31 12.63   32
NBTY   6.94  Sep   7.50  NBQIU  0.88 12.61 4033
NPTH   4.00  Sep   5.00  DQWIA  0.50 12.50  225
TERA   5.00  Sep   5.00  QIPIA  0.63 12.50  236
OMQP   9.56  Sep  10.00  OJQIB  1.19 12.42  149
ESPI  12.13  Sep  12.50   AQIV  1.50 12.37 2595
ETV    6.06  Sep   7.50  ETVIU  0.75 12.37  422
SYBS  11.63  Sep  12.50  SBQIV  1.44 12.37  884
MRVT  10.63  Sep  12.50  SQDIV  1.31 12.35  200
VVUS   4.09  Sep   5.00  VVQIA  0.50 12.21  421
MATK   9.25  Sep  12.50  KQTIV  1.13 12.16  134
PRTL  21.19  Sep  22.50  PQWIX  2.56 12.09  118
AAIR   6.75  Sep   7.50  VJQIU  0.81 12.04  805
RAYS  14.63  Sep  15.00  RQYIC  1.75 11.97  181
RAYS  14.63  Sep  17.50  RQYIW  1.75 11.97  110
RSTO  13.06  Sep  15.00  QYHIC  1.56 11.96  147
KELL  13.19  Sep  15.00  KQCIC  1.56 11.85   70
PGA    9.50  Sep  10.00  PGAIB  1.13 11.84  165
ESA   11.13  Sep  12.50  ESAIV  1.31 11.80  114
VVTV  26.63  Sep  30.00  UVRIF  3.13 11.74   34
PSUN  20.81  Sep  22.50  PVQIX  2.44 11.71   45
PLMD  11.88  Sep  12.50   PMIV  1.38 11.58   83
PRGY  27.13  Sep  30.00  PUYIF  3.13 11.52  300
OCN    7.69  Sep  10.00  OCNIB  0.88 11.38   66
DRMD  14.38  Sep  15.00  DUQIC  1.63 11.30 4700
APOS   6.69  Sep   7.50  QAPIU  0.75 11.21  234
IDX    8.94  Sep  10.00  IDXIB  1.00 11.19 1436
PTEC  16.75  Sep  17.50  PKQIW  1.88 11.19   10
GCTI  28.00  Sep  30.00  QHFIF  3.13 11.16  652
VSIO  29.22  Sep  30.00  VQJIF  3.25 11.12  129
CKR   14.63  Sep  15.00  CKRIC  1.63 11.11  320
CRY   11.81  Sep  12.50  CRYIV  1.31 11.11   65
RURL   9.06  Sep  10.00  QWMIB  1.00 11.03  280
VIRS  16.00  Sep  17.50  VQPIW  1.75 10.94  145
RMDY  27.44  Sep  30.00  LRQIF  3.00 10.93   41
CSGS  27.88  Sep  30.00  QGAIF  3.00 10.76  324
ADLT   8.75  Sep  10.00  LQYIB  0.94 10.71   23
TSX    8.19  Sep  10.00  TSXIB  0.88 10.69   71
CRUS   9.38  Sep  10.00  CUQIB  1.00 10.67  863
NETA  19.94  Sep  22.50  CQMIX  2.13 10.66 1479
PRXL  12.31  Sep  12.50  VBQIV  1.31 10.66   52
INTS  10.56  Sep  12.50  QINIV  1.13 10.65   73
PATH  10.00  Sep  10.00  AQEIB  1.06 10.63   91
DMIC  14.81  Sep  15.00  DMQIC  1.56 10.55  130
STAA  14.81  Sep  15.00  SQTIC  1.56 10.55   19
PAGE   5.94  Sep  10.00  PGQIB  0.63 10.53  112
VLNC   6.59  Sep   7.50  VHQIU  0.69 10.43 1143
TTWO   9.06  Sep  10.00  TUOIB  0.94 10.34  442
DGN   15.75  Sep  17.50  DGNIW  1.63 10.32 1848
GSTX  15.75  Sep  17.50  QGSIW  1.63 10.32   86
MMWW  21.88  Sep  22.50  EQBIX  2.25 10.29  262
PRHC  14.63  Sep  17.50  PUHIW  1.50 10.26    3
ONSL  18.94  Sep  22.50  QOLIX  1.94 10.23  209
AEN   19.00  Sep  20.00  AENID  1.94 10.20  124
APCC  22.06  Sep  22.50  PWQIX  2.25 10.20 1123
PRXL  12.31  Sep  17.50  VBQIW  1.25 10.15    5
CCBL  29.75  Sep  30.00  LQEIF  3.00 10.08   45
SEHI   4.38  Sep   5.00  HSQIA  0.44 10.00   60
ISP   10.00  Sep  10.00  ISPIB  1.00 10.00   20
IRID   7.38  Oct   7.50  QAKJU  1.94 26.27 6673
NSTA  14.31  Oct  20.00  NQBJD  3.75 26.20   17
MCNS  11.94  Oct  15.00  UCSJC  3.00 25.13  279
MESG  22.19  Oct  22.50  MUGJX  5.50 24.79   38
KLOC   7.06  Oct   7.50  KCUJU  1.75 24.78   80
NAVR   9.94  Oct  10.00  QHQJB  2.44 24.53  297
CLPA  13.63  Oct  15.00  QJCJC  3.25 23.85  176
OXGN   9.13  Oct  10.00  QYOJB  2.13 23.29   56
AXPH   4.94  Oct   5.00  QARJA  1.13 22.78  374
FRTE  12.19  Oct  12.50  RQFJV  2.69 22.05   50
MCNS  11.94  Oct  12.50  UCSJV  2.63 21.99   32
TMBS  16.88  Oct  17.50  QVTJW  3.63 21.48   33
DAOU   4.97  Oct   5.00  QQXJA  1.06 21.38   64
PCTL   6.44  Oct   7.50  PTQJU  1.38 21.36  195
AGS   12.31  Oct  12.50  AGSJV  2.63 21.32  447
NEON  16.56  Oct  17.50  QNOJW  3.50 21.13  217
ADAP  22.63  Oct  25.00  CQIJE  4.75 20.99   36
ARQL   4.50  Oct   5.00  QETJA  0.94 20.83  240
PTVL  23.06  Oct  25.00  QUTJE  4.75 20.60  434
ITIG   6.31  Oct   7.50  ITUJU  1.25 19.80   94
PRGN  26.75  Oct  27.50  GQPJY  4.88 18.22    3
NBIX   4.81  Oct   5.00  QAVJA  0.88 18.18  184
CGZ    7.25  Oct   7.50  CGZJU  1.31 18.10  217
BRH   12.44  Oct  12.50  BRHJV  2.25 18.09   40
SANG  19.94  Oct  20.00  QDYJD  3.50 17.55  154
SPYG  17.25  Oct  17.50  YQGJW  3.00 17.39  128
AKSY   6.13  Oct   7.50  KQKJU  1.06 17.35  100
INPR   4.72  Oct   5.00  BLQJA  0.81 17.22 1351
DTPI  24.75  Oct  25.00  DUPJE  4.25 17.17   51
KING  28.44  Oct  30.00  QBKJF  4.88 17.14   38
SPNS  12.13  Oct  12.50  QHHJV  2.00 16.49  429
ESST  12.25  Oct  12.50  SEQJV  2.00 16.33  281
IUSAB  7.69  Oct  10.00  BQUJB  1.25 16.26  145
FFTI  10.00  Oct  10.00  QFOJB  1.63 16.25   53
PIN    6.94  Oct   7.50  PINJU  1.13 16.22  141
POSS  10.81  Oct  12.50  UPQJV  1.75 16.18  126
VANS  12.38  Oct  12.50  VQGJV  2.00 16.16   60
IRID   7.38  Oct  10.00  QAKJB  1.19 16.10 9965
CS    14.81  Oct  15.00   CSJC  2.38 16.03 3461
MAVK  12.50  Oct  12.50  KQGJV  2.00 16.00  238
CMTO  19.63  Oct  20.00  CQHJD  3.13 15.92  529
HMTT   3.16  Oct   5.00  HTQJA  0.50 15.84  808
PGEX  28.56  Oct  30.00  QAEJF  4.50 15.75  835
ELMG  13.50  Oct  15.00  EMQJC  2.13 15.74   25
LOR   20.94  Oct  22.50  LORJX  3.25 15.52 2239
CDO   25.19  Oct  27.50  CDOJY  3.88 15.38   24
WALL  10.56  Oct  12.50  WLQJV  1.63 15.38  235
CELG  16.31  Oct  17.50  LQHJW  2.50 15.33   95
CREAF 12.31  Oct  12.50  RFQJV  1.88 15.23   78
ENTU  28.88  Oct  30.00  QYEJF  4.38 15.15  202
NEON  16.56  Oct  20.00  QNOJD  2.50 15.09  318
SYNM   8.31  Oct  10.00  QSHJB  1.25 15.04   10
SGE    7.50  Oct   7.50  SGEJU  1.13 15.00  155
SCIXF 10.00  Oct  10.00  SXQJB  1.50 15.00  734
SRCM  15.88  Oct  17.50   SQJW  2.38 14.96  325
TLK   12.13  Oct  12.50  TLKJV  1.81 14.95   20
HEPH  15.19  Oct  17.50  HUPJW  2.25 14.81  306
NCSS   5.06  Oct   7.50  NQWJU  0.75 14.81  229
TIER   6.75  Oct   7.50  QTIJU  1.00 14.81  183
SPLH   7.25  Oct   7.50  QRXJU  1.06 14.66   57
TIE   12.00  Oct  12.50  TIEJV  1.75 14.58  245
TSFW  24.06  Oct  25.00  SUWJE  3.50 14.55   51
IMG    7.31  Oct   7.50  IMGJU  1.06 14.53   65
SPYG  17.25  Oct  22.50  YQGJX  2.50 14.49  131
JDAS   9.50  Oct  10.00  QAHJB  1.38 14.47  153
RDRT   6.06  Oct   7.50  RDQJU  0.88 14.43 2005
INFS  19.56  Oct  20.00  IQLJD  2.81 14.38   37
SUPG  20.00  Oct  20.00  UQGJD  2.88 14.37  766
HS     4.38  Oct   5.00   HSJA  0.63 14.29 5126
TWA    4.81  Oct   5.00  TWAJA  0.69 14.28 3009
KLOC   7.06  Oct  10.00  KCUJB  1.00 14.16  240
SANG  19.94  Oct  22.50  QDYJX  2.81 14.11   20
NEV   17.31  Oct  17.50  NEVJW  2.44 14.08  100
USWB  26.69  Oct  30.00  QWBJF  3.75 14.05 1182
WMS   14.69  Oct  15.00  WMSJC  2.06 14.04 3334
SK    13.38  Oct  20.00   SKJD  1.88 14.02   66
NETG  27.00  Oct  30.00  NUGJF  3.75 13.89  179
NAVR   9.94  Oct  12.50  QHQJV  1.38 13.84  346
ANSR  22.63  Oct  25.00  QRAJE  3.13 13.81   37
BJS   29.13  Oct  30.00  BJSJF  4.00 13.73 2694
GYMB   6.38  Oct   7.50  GMQJU  0.88 13.73   12
MRVC  15.06  Oct  17.50  VQXJW  2.06 13.69   74
APM    2.75  Oct   5.00  APMJA  0.38 13.64 6082
RPC   24.75  Oct  25.00  RPCJE  3.38 13.64  307
FILE  11.06  Oct  12.50  ILQJV  1.50 13.56  263
PLC    3.69  Oct   5.00  PLCJA  0.50 13.56  918
PTVL  23.06  Oct  30.00  QUTJF  3.13 13.55  651
QHGI   9.75  Oct  15.00  HQGJC  1.31 13.46   84
SYMC  29.75  Oct  30.00  SYQJF  4.00 13.45  213
INTL  20.00  Oct  20.00  TPQJD  2.69 13.44   56
LCP    9.31  Oct  10.00  LCPJB  1.25 13.42   15
BRKT  18.75  Oct  20.00  BUQJD  2.50 13.33  209
CLCI   9.88  Oct  10.00  QAZJB  1.31 13.29  223
SDC   21.75  Oct  22.50  SDCJX  2.88 13.22  291
SOI   19.88  Oct  20.00  SOIJD  2.63 13.21   20
DCTM  16.19  Oct  17.50  QDCJW  2.13 13.13  235
MCNS  11.94  Oct  20.00  UCSJD  1.56 13.09  130
MOGN  13.44  Oct  15.00  QOGJC  1.75 13.02   80
PAIR  11.06  Oct  12.50  PQGJV  1.44 12.99  747
ORG   11.56  Oct  12.50  ORGJV  1.50 12.97  540
MANU  15.44  Oct  17.50  ZUQJW  2.00 12.96  161
ARDM   9.69  Oct  10.00  QRQJB  1.25 12.90   63
ASHW   4.88  Oct   5.00  AQWJA  0.63 12.82  138
ERTH   7.81  Oct  10.00  QERJB  1.00 12.80  329
CMTO  19.63  Oct  22.50  CQHJX  2.50 12.74  125
RWAV   6.88  Oct   7.50  RQRJU  0.88 12.73   70
TALK  10.81  Oct  12.50  QQKJV  1.38 12.72  290
SIII  11.34  Oct  12.50  SQIJV  1.44 12.67  231
IUSAA  7.56  Oct  10.00  HAQJB  0.94 12.40   17
PRRC   9.63  Oct  10.00  MQXJB  1.19 12.34  135
MSM    9.63  Oct  12.50  MSMJV  1.19 12.34   12
PMRY  16.25  Oct  17.50  PBQJW  2.00 12.31   35
FRTE  12.19  Oct  15.00  RQFJC  1.50 12.31   45
SMRT   8.13  Oct  10.00  STQJB  1.00 12.31   26
ICO   14.25  Oct  15.00  ICOJC  1.75 12.28  306
ASTX  22.94  Oct  25.00  AUTJE  2.81 12.26   10
CELG  16.31  Oct  20.00  LQHJD  2.00 12.26  227
REV   26.50  Oct  30.00  REVJF  3.25 12.26 1153
ZIGO  11.25  Oct  12.50  UZYJV  1.38 12.22   28
BUR    8.19  Oct  10.00  BURJB  1.00 12.21   79
GSNX  16.38  Oct  17.50  GQSJW  2.00 12.21   55
AGS   12.31  Oct  15.00  AGSJC  1.50 12.18   99
CMTO  19.63  Oct  25.00  CQHJE  2.38 12.10  186
ALGO  26.88  Oct  30.00  GQLJF  3.25 12.09  206
AMSC  15.00  Oct  17.50  QAYJW  1.81 12.08   90
SDTI  20.75  Oct  22.50  QSDJX  2.50 12.05  222
MCNS  11.94  Oct  17.50  UCSJW  1.44 12.04   37
CMNT  17.75  Oct  20.00  QDOJD  2.13 11.97   88
RSLC  23.00  Oct  25.00  QRLJE  2.75 11.96  355
AU    19.38  Oct  20.00   AUJD  2.31 11.94 1106
SFY   11.00  Oct  12.50  SFYJV  1.31 11.93  300
WHX    6.81  Oct   7.50  WHXJU  0.81 11.93  133
MXTR   5.25  Oct   7.50  MQLJU  0.63 11.90 2263
TTEC  11.06  Oct  12.50  QTCJV  1.31 11.86   29
TSP   21.13  Oct  22.50  TSPJX  2.50 11.83   70
ESLTF 17.50  Oct  17.50  EQXJW  2.06 11.79   25
PENN   9.56  Oct  10.00  UQNJB  1.13 11.76   54
XLTC  13.88  Oct  15.00  XNQJC  1.63 11.71  232
BARZ  23.50  Oct  25.00  BJQJE  2.75 11.70    8
SFAM  17.13  Oct  17.50  FQFJW  2.00 11.68  477
PRMS   8.03  Oct  10.00  RQSJB  0.94 11.67  642
RADA   9.13  Oct  10.00  QDRJB  1.06 11.64   20
BPLS   5.38  Oct   7.50  QBPJU  0.63 11.63   20
LWIN  19.38  Oct  20.00  UINJD  2.25 11.61   74
BNYN  10.25  Oct  12.50  QYNJV  1.19 11.59  120
ACN   16.75  Oct  17.50  ACNJW  1.94 11.57  104
STN   21.63  Oct  22.50  STNJX  2.50 11.56   15
BKS   24.94  Oct  25.00  BKSJE  2.88 11.53  569
KLOC   7.06  Oct  17.50  KCUJW  0.81 11.50  339
TCA   10.88  Oct  12.50  TCAJV  1.25 11.49  472
KEG    3.81  Oct   5.00  KEGJA  0.44 11.47  799
SLMD  17.50  Oct  20.00  QSQJD  2.00 11.43  140
CVG   22.00  Oct  22.50  CVGJX  2.50 11.36  220
NRGN  16.50  Oct  17.50  NQOJW  1.88 11.36    8
KMET  24.22  Oct  25.00  KQEJE  2.75 11.35  124
NSTA  14.31  Oct  17.50  NQBJW  1.63 11.35   40
ESCMF  6.06  Oct   7.50  QFCJU  0.69 11.34  474
TEK   28.69  Oct  30.00  TEKJF  3.25 11.33  196
AKLM   6.63  Oct   7.50  KKQJU  0.75 11.32  468
NEON  16.56  Oct  22.50  QNOJX  1.88 11.32   61
MRX   24.38  Oct  25.00  MRXJE  2.75 11.28  423
AFWY  18.88  Oct  20.00  FQDJD  2.13 11.26   58
NR     9.44  Oct  10.00   NRJB  1.06 11.26  223
PSCX  10.00  Oct  10.00  QPSJB  1.13 11.25   70
CNS   16.69  Oct  17.50  CNSJW  1.88 11.24   33
WALL  10.56  Oct  15.00  WLQJC  1.19 11.24   59
WAXS  15.63  Oct  17.50  WXQJW  1.75 11.20   68
HYC    9.56  Oct  10.00  HYCJB  1.06 11.11  120
TSA    3.38  Oct   5.00  TSAJA  0.38 11.11 1105
WDC    6.19  Oct   7.50  WDCJU  0.69 11.11 1435
FAF   17.50  Oct  20.00  FAFJD  1.94 11.07  720
ENZ   13.56  Oct  15.00  ENZJC  1.50 11.06  805
SE    28.38  Oct  30.00   SEJF  3.13 11.01 1395
AIR   22.19  Oct  22.50  AIRJX  2.44 10.99   11
CS    14.81  Oct  17.50   CSJW  1.63 10.97  973
PAUH   6.88  Oct   7.50  PUQJU  0.75 10.91  117
ITIG   6.31  Oct  10.00  ITUJB  0.69 10.89  130
SPYG  17.25  Oct  20.00  YQGJD  1.88 10.87  343
ANSR  22.63  Oct  30.00  QRAJF  2.44 10.77  102
PRGN  26.75  Oct  30.00  GQPJF  2.88 10.75  207
FAF   17.50  Oct  17.50  FAFJW  1.88 10.71   88
IGL   17.50  Oct  17.50  IGLJW  1.88 10.71   54
TKN    7.00  Oct   7.50  TKNJU  0.75 10.71   30
NAUT  17.00  Oct  17.50  NQTJW  1.81 10.66  332
TSFW  24.06  Oct  27.50  SUWJY  2.56 10.65   43
UBB   21.75  Oct  22.50  UBBJX  2.31 10.63    4
PKD    4.13  Oct   5.00  PKDJA  0.44 10.61 2227
MPS   14.19  Oct  15.00  MPSJC  1.50 10.57  445
MENT  14.25  Oct  15.00  MGQJC  1.50 10.53  277
PSFT  16.06  Oct  17.50  PQOJW  1.69 10.51 2545
GTRC  11.31  Oct  12.50  GURJV  1.19 10.50   37
VSVR  10.13  Oct  12.50  UFQJV  1.06 10.49  132
ADVNA 19.81  Oct  20.00  AVQJD  2.06 10.41  351
NVH   24.63  Oct  25.00  NVHJE  2.56 10.41   60
POSS  10.81  Oct  15.00  UPQJC  1.13 10.40  382
TMBS  16.88  Oct  20.00  QVTJD  1.75 10.37   12
MRNT  21.75  Oct  22.50  QGMJX  2.25 10.34  125
SPLH   7.25  Oct  10.00  QRXJB  0.75 10.34   79
OII   17.00  Oct  17.50  OIIJW  1.75 10.29  231
MUEI  11.56  Oct  12.50  MQUJV  1.19 10.27 1238
SCBI   5.50  Oct   7.50  TQLJU  0.56 10.23   45
SFAM  17.13  Oct  20.00  FQFJD  1.75 10.22  189
HLYW  18.38  Oct  22.50  HWQJX  1.88 10.20   13
PLC    3.69  Oct   7.50  PLCJU  0.38 10.17  136
SOC    7.38  Oct   7.50  SOCJU  0.75 10.17 2050
RAD   23.38  Oct  25.00  RADJE  2.38 10.16 1370
BST   24.63  Oct  25.00  BSTJE  2.50 10.15 2443
SNRZ  28.38  Oct  30.00  QSRJF  2.88 10.13   51
RG    21.00  Oct  22.50   RGJX  2.13 10.12  210
KLIC  28.44  Oct  30.00  KQSJF  2.88 10.11  282
CTAL  13.00  Oct  15.00  QANJC  1.31 10.10  106
OCLR  17.94  Oct  20.00  QLOJD  1.81 10.10  109
HM     7.44  Oct   7.50   HMJU  0.75 10.08 2279
CPQ   27.31  Oct  27.50  CPQJY  2.75 10.0712077
CYBX  12.44  Oct  15.00  QAJJC  1.25 10.05  101
SSNC   7.50  Oct  10.00  QUQJB  0.75 10.00   15
ZILA   3.13  Oct   5.00  QWCJA  0.31 10.00  874


Conservative Strategies Deliver Consistent Profits..

Put writing, also known as put selling, is designed to complement
a stock trading portfolio because it offers two very conservative
methods for generating profits: collecting premium by selling an
out-of-the money option and/or acquiring a favorable stock at a
reduced price.

Our favorite technique involves selling an out-of-the-money put
(sometimes two or more strikes away) on a stock that the investor
expects to finish above the sold position . The majority of the
time, the put sold will expire worthless, allowing the investor
to pocket the premium and receive a reasonable profit without ever
having to buy the stock. While there is a margin requirement when
selling puts, this commitment of funds might be compared to the
outright purchase of the equivalent number of shares.

Put selling takes advantage of the concept of time decay - the
premium an option sells for declines as the option approaches
expiration. Also known as time erosion, time decay allows the
options trader to profit without having to correctly predict the
future direction of a stock's movement, as long as it remains
above a predetermined price. Time premium will decay at a fairly
predictable rate and will decay most rapidly the closer the option
gets to its expiration.

This month, the portfolio provided 31 profitable positions out of
32 potential candidates.

The #1 play in our naked-put portfolio was Beyond.com (BYND) with
a monthly return of 19%.  There were several plays with a 30 day
return above 10% which included:  Customtracks (CUST), Proxymed
(PILL), Carrier Access (CACS), Mercury Interactive (MERQ), Sbarro
(SBA), Net.Bank (NETB), Sabratek (SBTK), Pharmacyclics (PCYC),
Riggs National (RIGS),  Sportsline USA (SPLN), & Icg Comm (ICGX).
There were many other issues just under 10%: ANAD, STII, GALT,
CIEN, EGRP, SGI, & NE; and above 8%: PWAV, REV, BOBJ, PRD, & CNTO.

Our August positions are currently 100% successful and we expect
the bullish trend to continue through the summer months.

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

BYND   27.81  27.97   Jul  22.50  0.56  *$  0.56   8.8%  19.1%
CUST   50.06  44.31   Jul  35.00  1.13  *$  1.13  10.1%  14.7%
PILL   13.88  15.56   Jul  12.50  0.81  *$  0.81  16.3%  14.1%
CACS   35.00  41.00   Jul  25.00  0.75  *$  0.75   9.7%  14.0%
MERQ   35.38  43.88   Jul  30.00  0.88  *$  0.88   9.1%  13.2%
NTBK   39.00  31.88   Jul  30.00  0.50  *$  0.50   6.0%  13.1%
SBTK   27.25  27.38   Jul  20.00  0.94  *$  0.94  14.7%  12.8%
PCYC   21.13  28.00   Jul  17.50  0.81  *$  0.81  14.4%  12.5%
SBA    27.38  27.81   Jul  25.00  0.50  *$  0.50   5.5%  12.0%
RIGS   20.63  20.50   Jul  17.50  0.44  *$  0.44   7.9%  11.5%
SPLN   34.31  39.88   Jul  25.00  0.38  *$  0.38   5.2%  11.4%
ICGX   23.13  27.00   Jul  20.00  0.31  *$  0.31   4.8%  10.5%
ANAD   31.31  37.44   Jul  25.00  0.63  *$  0.63   9.1%   9.9%
STII   25.00  27.94   Jul  20.00  0.50  *$  0.50   9.1%   9.9%
GALT   41.00  62.25   Jul  35.00  0.75  *$  0.75   6.7%   9.7%
CIEN   30.50  37.13   Jul  25.00  0.81  *$  0.81  10.8%   9.4%
EGRP   39.94  37.50   Jul  32.50  0.38  *$  0.38   4.3%   9.3%
SGI    14.63  16.94   Jul  12.50  0.25  *$  0.25   6.3%   9.1%
NE     20.00  21.06   Jul  17.50  0.50  *$  0.50   8.3%   9.1%
PWAV   30.50  37.94   Jul  25.00  0.44  *$  0.44   6.2%   8.9%
REV    30.38  26.50   Jul  22.50  0.69  *$  0.69  10.2%   8.9%
BOBJ   37.00  42.69   Jul  30.00  0.69  *$  0.69   8.1%   8.8%
PRD    27.50  22.88   Jul  22.50  0.38  *$  0.38   6.0%   8.6%
CNTO   50.94  54.25   Jul  40.00  0.81  *$  0.81   7.4%   8.0%
SUGN   22.75  30.75   Jul  17.50  0.44  *$  0.44   8.8%   7.7%
NRES   20.25  21.13   Jul  17.50  0.50  *$  0.50   8.5%   7.4%
CUBE   32.00  35.00   Jul  25.00  0.56  *$  0.56   8.0%   7.0%
CUBE   32.00  35.00   Jul  25.00  0.44  *$  0.44   6.4%   7.0%
TDW    28.75  31.75   Jul  25.00  0.50  *$  0.50   6.1%   6.6%
AMES   47.50  43.13   Jul  40.00  0.69  *$  0.69   5.7%   6.1%
EGRP   37.81  37.50   Jul  25.00  0.56  *$  0.56   6.9%   6.0%
SEEK   55.88  42.06   Jul  45.00  0.88   $ -2.06 -16.7%   0.0%
MGCX   28.00  30.25   Aug  20.00  1.13  *$  1.13  16.8%  12.2%
NETS   19.56  24.50   Aug  15.00  0.75  *$  0.75  16.1%  11.7%
PTVL   23.63  23.06   Aug  17.50  0.81  *$  0.81  14.6%  10.6%
QNTM   24.56  25.81   Aug  17.50  1.00  *$  1.00  16.9%  10.5%
CDNW   19.94  22.69   Aug  15.00  0.56  *$  0.56  12.3%   8.9%
BYND   29.50  27.97   Aug  20.00  0.75  *$  0.75  11.3%   8.2%
LIPO   20.88  20.88   Aug  17.50  0.63  *$  0.63  11.3%   8.1%
DRIV   35.31  32.25   Aug  25.00  0.88  *$  0.88  11.1%   8.0%
AMTD   38.19  34.25   Aug  25.00  0.75  *$  0.75   8.9%   6.5%
ADAP   23.19  22.63   Aug  17.50  0.44  *$  0.44   8.7%   6.3%
PAMC   33.69  34.00   Aug  20.00  0.56  *$  0.56   7.7%   5.6%

July Plays that were not playable (and very profitable):

*    NLC - merger/take-over was announced before the open!

-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)
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

CIEN   37.13  Aug 30.00  EUQ TF  0.63  362   29.37   7.5%
DRIV   32.44  Aug 22.50  DQI TX  0.50  10    22.00   7.2%
GISX   21.13  Aug 17.50  GQC TW  0.56  26    16.94  10.4%
MCOM   35.38  Aug 20.00  MQM TD  0.44  48    19.56   5.9%
MIPS   43.94  Aug 30.00  MUP TF  0.75  130   29.25   7.9%
PRIA   38.63  Aug 30.00  UXQ TF  1.00  785   29.00  11.5%
PSSI   12.00  Aug 10.00  PYQ TB  0.44  433    9.56  13.6%
RMII   13.13  Aug 10.00  RMU TB  0.38  64     9.62  12.6%
SNRS   16.63  Aug  7.50  RNU TU  0.31  227    7.19   8.5%
Sequenced by Return on Investment  
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

PSSI   12.00  Aug 10.00  PYQ TB  0.44  433    9.56  13.6%
RMII   13.13  Aug 10.00  RMU TB  0.38  64     9.62  12.6%
PRIA   38.63  Aug 30.00  UXQ TF  1.00  785   29.00  11.5%
GISX   21.13  Aug 17.50  GQC TW  0.56  26    16.94  10.4%
SNRS   16.63  Aug  7.50  RNU TU  0.31  227    7.19   8.5%
MIPS   43.94  Aug 30.00  MUP TF  0.75  130   29.25   7.9%
CIEN   37.13  Aug 30.00  EUQ TF  0.63  362   29.37   7.5%
DRIV   32.44  Aug 22.50  DQI TX  0.50  10    22.00   7.2%
MCOM   35.38  Aug 20.00  MQM TD  0.44  48    19.56   5.9%
Company Descriptions
CIEN - Ciena Corporation $37.13      *** Stage II ***

CIENA's market leading optical networking systems form the core
of telecommunications networks worldwide. Ciena's networking
solutions utilize bandwidth expanding dense wavelength division
multiplexing (DWDM) technology for long-haul, short-haul and
metropolitan applications. Ciena was upgraded at the end of June
and recently completed its purchase of privately held Omnia 
Communications. Technically in a Stage II climb in a hot sector.

Aug  30.00  EUQ TF  Bid=0.63  OI=362  CB=29.37  ROI=7.5%

Chart = http://quote.yahoo.com/q?s=cien&d=3m
DRIV - Digital River  $32.44

DRIV provides comprehensive electronic commerce outsourcing
solutions to software publishers and online retailers. DRIV
derives its revenue primarily from sales of 3rd party software
by managing online stores for software publishers and retailers.
Their strong distribution capability will enhance the benefit
from several recent partnerships and acquisitions. Earnings are
expected this week.

Aug  22.50  DQI TX  Bid=0.50  OI=10  CB=22.00  ROI=7.2%

Chart = http://quote.yahoo.com/q?s=DRIV&d=3m
GISX - Global Imaging Systems  $21.13  *** New High? ***

Global Imaging Systems is becoming a one-stop shop for office
imaging solutions. The company provides a broad line of products
including the sale and service of automated office equipment,
network integration services, electronic presentation systems,
and document imaging management systems. The company is a rapidly
growing consolidator in the industry and was just added to the
Russell 2000 index.

Aug  17.50  GQC TW  Bid=0.56  OI=26  CB=16.94  ROI=10.4%

Chart = http://quote.yahoo.com/q?s=GISX&d=3m
MCOM - Metricom  $35.38    *** Roller Coaster ***

Metricom is a leading provider of mobile data networking and
technology. The Company's Ricochet service provides mobile
professionals with high-performance, cost-effective untethered
access to the Internet, private Intranets, local-area networks,
e-mail, and other online services. Reported favorable earnings
on Thursday (no surprises!) and should benefit from the infusion
of capital - $600 million - from Vulcan and MCI Worldcom. Expect
a consolidation but the $20 strike appears fairly safe.
Aug  20.00  MQM TD  Bid=0.44  OI=48  CB=19.56  ROI=5.9%

Chart = http://quote.yahoo.com/q?s=MCOM&d=3m
MIPS - Mips Technologies  $43.94

MIPS Technologies is the world's primary architect of embedded
RISC processors. They have a broad alliance that is delivering
32/64 bit solutions. MIPS licenses architectures, CPUs, cores
and associated technology to chip manufactures, ASIC developers,
foundries, and system OEMs. Recent agreements and strategic
partnerships combined with a well-defined industry niche will
contribute to the company's future success. Technical support 
near the cost basis.
Aug  30.00  MUP TF  Bid=0.75  OI=130  CB=29.25  ROI=7.9%

Chart = http://quote.yahoo.com/q?s=MIPS&d=3m
PRIA - PRI Automation, Inc.  $38.63   

PRI Automation is the leading global supplier of advanced factory
automation systems and software that optimize the productivity of
semiconductor and precision electronics manufacturers, as well as
OEM process tool manufacturers. Coverage was initiated at the 
beginning of July by Hambrecht & Quist. On Monday, PRI announced
its SFO-1000, a 300mm loadport product. PRI looks ready to test 
the January high with technical support near the sold strike. 
Earnings are expected this week.

Aug  30.00  UXQ TF  Bid=1.00  OI=785  CB=29.00  ROI=11.5%

Chart = http://quote.yahoo.com/q?s=PRIA&d=3m
PSSI - PSS World Medical, Inc.  $12.00   

PSSI is a specialty marketer and distributor of medical products 
to physicians, alternate-site imaging centers, long-term care 
providers, home care providers, and hospitals through 111 service 
centers to customers in all 50 states and three European countries.
PSS has recently signed a distribution agreement with Philips 
Medical Systems and acquired four companies through its subsidiary 
Diagnostic Imaging (adding annualized revenues of approximately 
$15 million). The company's delayed annual report was released
Friday. PSS World has not been near $10 since April.

Aug  10.00  PYQ TB  Bid=0.44  OI=433  CB=9.56  ROI=13.6%   

Chart = http://quote.yahoo.com/q?s=PSSI&d=3m
RMII - Rocky Mountain Internet  $13.13 * Second Tier Internet *

RMII, a national full-service Internet based communications 
provider offers a wide range of services, including Internet 
access, Web Solutions, e-commerce, phone services and other 
related services. Rocky Mountain has been on a buying spree
acquiring several companies since January and expanding 
across the Midwest. With the secondary Internets gaining
attention, this play offers a chance at a favorable entry.

Aug  10.00  RMU TB  Bid=0.38  OI=64  CB=9.62  ROI=12.6%

Chart = http://quote.yahoo.com/q?s=RMII&d=3m
SNRS - Sunrise Tech. Int'l, Inc.  $16.63

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) which is 
currently in use in Europe and the Americas, and is in clinical 
trials in the United States. On Tuesday, Sunrise received approval
from the FDA to treat the second eye on the same day it treats
the first eye in clinical trials. The recent volatility has 
inflated premiums, providing an entry point with a cost basis 
well below technical support. 

Aug  7.50  RNU TU  Bid=0.31  OI=227  CB=7.19  RC=8.5%    

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



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