---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
01/18/99 08:27 AM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)
                       01/17/99 05:44 AM

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>
cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Sunday - Option Investor Newsletter 3 of 7 (calls)

The Option Investor Newsletter          1-17-98
Sunday             Part 3 of 7

******************************************
TLAB - Tellabs $85.94 (+11.63)(P3W $10.18)

Tellabs is quickly becoming a powerhouse in the Telecom
equipment industry. With their TITAN and CABLESPAN systems,
and its DXX multiplexers, TLAB is raking in the money from
customers among the telephone companies, cable operators,
and government agencies.  Though they faded from news of
their failed merger of Ciena, Tellabs is still a major
player.

Wow!  What a play.  TLAB gave up only $0.44 in Thursday's
turmoil and came smokin' back $5.25 on Friday to close at
$85.94.  Technicals look outstanding with a small
consolidation already taken place; all indicators in
positive territory.  We introduced the play Thursday under
the following logic: TLAB spiked up $13 last Tuesday to $78
on 11 million shares, $8 higher than resistance previously
set at $70.  TLAB drifted back to $74, then spiked $5 to
$79, on average volume of 3.5 million.  Over the previous 3
trading days, it gained in market weakness while giving
back only $.44 in heavy trading in a downright bearish
market - a terrific sign of strength.  3.5 million shares
traded daily; 147 million shares in float; $3.14 per share
in cash; 34% return on equitystrong fundamentals.  We
expect them to announce more contracts in the coming weeks.
Recent news is capturing investors' eyeballs, making for a
good story.  We could find no news on Friday driving the
price; just market recovery and stock momentum.

Monday, Warburg, Dillion Read raised their rating to a
"buy" citing raised earnings per share estimates to $2.35
and $2.93 from $2.30 and $2.85 for 1999 and 2000,
respectively.  They further state, "fundamentals for the
telecom equipment group has improved over the past few
months which improves visibility for Tellabs" and "Our
checks with Tellabs will report fourth quarter 1998 results
slightly better than our $0.58 earnings per share estimate,
as well as having a positive outlook for 1999" (Reuters).
Also, rumors surfaced last week that TLAB was a targeted
buyout/merger candidate, but were quickly squashed.  Not
soon enough, though, to draw investor attention to the
price move.

BUY CALL FEB-80 TEQ-BP OI=1270 at $ 9.75 SL= 7.25 ATM
BUY CALL FEB-85*TEQ-BQ OI= 965 at $ 7.00 SL= 5.75 OTM
BUY CALL MAR-85 TEQ-CQ OI= 873 at $ 9.38 SL= 7.00 more time
BUY CALL JUN-85 TEQ-FQ OI= 105 at $13.75 SL=11.00 OTM
highest strike available

Picked on Jan. 14th     $80.69          PE= 39
Change since picked     $ 5.25          52 week low =$31.38
Analysts Ratings    15-9-3-0-0          52 week high=$93.12
Last earnings on 09-98 est=.46          actual=.49
Next earnings on 01-25 est=.59          versus=.42
Chart = http://quote.yahoo.com/q?s=TLAB&d=3m
********************************************
QCOM - Qualcomm, Inc. $63.88 (+3.63)

QCOM develops, manufactures, markets, licenses, and operates
advanced communications systems and products based on digital
wireless technology. The Company's primary product areas are
the OmniTRACS system (a geostationary satellite-based,
mobile communications system providing two-way data and
position reporting services), CDMA wireless communications
systems and products and, in conjunction with others, the
development of the Globalstar low-earth-orbit (LEO)
satellite communications system.  The company's CDMA technology
has become the dominant wireless transmission standard in the
US and Korea, and is gaining momentum in a host of other
countries.  Demand for CDMA phones is surging as the US
wireless industry is migrating from analog to digital.

In the news last week, QCOM, along with several other
companies, purchased a concession to operate a fixed line
telephone service in Brazil.  QCOM has indicated, in the past,
that it is lobbying China to adopt its CDMA technology.  Since
1990, the average annual growth rate of mobile phone users in
China has been about 160%, according to government figures.
QCOM is building a global presence.  It was also reported on
CNBC on Friday that there is renewed interest in QCOM as a
takeover candidate given the recent acquisition of ATI and the
LU/ASND merger.  If fact, the entire sector is expecting
another round of takeovers given the competitive landscape.

QCOM has been in a basing pattern since last November.  It
actually fell below its 200 day moving average in December, and
then started its current run around the beginning of the year.
QCOM reports earnings on Tuesday just before the close.  As
you know we don't recommend holding over earnings releases, but
QCOM might make an interesting short term trade before the
earnings release.  Depending on the earnings release on
Tuesday, we also like QCOM as a play after the release given
the merger activity in the sector.  After the earnings release,
wait for a direction before initiating a play.

BUY CALL FEB-60 QAQ-BL OI=1421 at $7.25 SL=5.25
BUY CALL FEB-65*QAQ-BM OI=1224 at $4.38 SL=2.75
BUY CALL FEB-70 QAQ-BN OI= 745 at $2.50 SL=1.25
BUY CALL APR-70 QAQ-DN OI= 401 at $5.13 SL=3.25
BUY CALL JUL-70 QAQ-GN OI=  37 at $7.88 SL=6.25

Picked on Jan 17th at $63.88   PE=22
Change since picked    +0.00   52 week low =$37.75
Analysts Ratings   6-8-6-0-0   52 week high=$67.38
Last earnings  09-98 est=.50   actual=.54
Next earnings  01-19 est=.59   versus=.58
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m
********************************************
NOK.A  Nokia  $138.59 (+$3.59)

Nokia is a supplier of telecommunications systems and
equipment and is the world's leading maker of cellular
phones. It's telecommunications and mobile phone sales are
growing rapidly, and margins are higher as well. Nokia is
increasing plant capacity to keep up with demand.

We covered Nokia from Dec. 13th until Jan. 10th as both a
split candidate and a momentum play. It climbed steadily
for us into the first week of January, when the stock got
ahead of itself. It had risen a little too quickly due to
enthusiasm for the new Euro and to excitement over the ATI
bids. When it began pulling back from its $142.25 close on
Jan.6th, we feared a correction and became reluctant to
recommend new positions, so we dropped it. With yesterday's
$6.34 rebound, the correction appears to be over, and the
stock remains well above its moving averages, so we are
adding it back to our recommended plays. When NOKA
announced a split in Feb. 1998, a long and steep split run
followed. We have been unable to confirm the expected
earnings release date for this foreign owned stock, but we
will keep you posted, as that is a likely time for a new
split announcement.

Since we dropped it, Nokia has entered the pre-paid mobile
phone market in an agreement with Topp Telecom, Inc., of
Miami. Other recent news on this stock can still be found
in previous newsletters posted on the O.I. website. When
researching NOK.A, be aware that some sites require the dot
and some won't allow it.

BUY CALL FEB-135 NAY-BG OI=393 at $11.38 SL= 9.00
BUY CALL FEB-140*NAY-BH OI=241 at $ 8.88 SL= 6.75
BUY CALL APR-135 NAY-DG OI=299 at $17.00 SL=13.00
BUY CALL APR-140 NAY-DH OI=175 at $14.88 SL=11.75
BUY CALL JUL-140 NAY-GH OI= 14 at $ 9.25 SL= 7.00

Picked on Jan 17th  at  $138.59         P/E= n/a
Change since picked       $0.00         52 week low= 35.31
Analysts' ratings    10-6-0-0-0         52 weekhigh=142.50
Last earnings  9/98  est= $ .67  act=$.88  surprise=31%
Next earnings 12/98  est= $1.01
Chart = http://quote.yahoo.com/q?s=NOKA&d=3m
*******************************************
Software - Sector
*******************************************
MSFT - Microsoft $149.75 (-0.13)(+11.19)(-3.06)(P5W +28.13)

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

Extremely volatile, but almost no change from the previous
week.  Price range last week was $136 to $150 on above
average volume for 4 of 5 trading days.  Friday gave us an
$8 gain following the Brazilian downdraft.  CS First Boston
said Microsoft "appears on track" to meet or beat estimate
of 60 cents per share - an increase of 46 percent from the
42 cents in the same quarter last year.  Sales are expected
to increase 21 percent to $4.3 billion.  With conviction,
we still predict a stock split with the earnings
announcement after the close January 19th (MSFT confirmed
this date); only 1 trading day away.  Historically, MSFT
has split like clockwork at $140.  MSFT has expressed
optimism about their future and has every reason to split
the stock.  MSFT is trading just $3 off its all-time high
of $152.50, set the previous week.  Prudential last week
set a price target of $175.  We think their relative price
compared to the market reflects strong investor confidence.
A great play in the making.

Unsavory news release late Thursday: A federal judge
scolded Microsoft Corp. over new contract language
requiring temporary workers to waive any awards from a
pending lawsuit over the software giant's employment
practices (Reuters).  It had no affect on the stock, but
raised eyebrows in the PR department.  Conversely, a new
Microsoft poll shows that 76 percent of American consumers
believe that Microsoft has benefited both U.S. consumers
and the computer software industry (Reuters).  The real
surprise was another press release stating Robert Bork
believes Microsoft should be broken into 3 companies; an
unusual comment from a free market champion, until you
realize he's paid by Netscape to represent them in the
Justice Departments case.  Finally, MSFT appealed the Sun-
Java infringement injunction citing that it believes the
court mistakenly treated the case filed against it by Sun
as a copyright issue, rather than a contract dispute.  We
reiterate, "no material effect on earnings".  Everen
Securities still has their price targets(0-6 months) of
$161 and their long term (6-18 months) of $200

BUY CALL FEB-145 MSQ-BI OI= 7806 at $11.38 SL=9.00 ITM 4.75
BUY CALL FEB-150*MSQ-BJ OI=14655 at $ 8.75 SL=6.50 ATM
BUY CALL APR-155 MSQ-DU OI= 3228 at $10.88 SL=8.75
BUY CALL APR-160 MSQ-DX OI= 3214 at $ 9.25 SL=7.00

Picked on December 8th at $133.63     PE = 70
Change Since Picked      +$ 16.12     52 Week High= 152.50
Analysts Ratings       14-8-5-0-0     52 Week Low =  62.19
Last Earnings 09/98 est. 0.49 actual .56  surprise 14.29%
Next Earnings 01-19 est. 0.58 versus .43

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
*******************************************
CHKPF  Check Point Software $51.25 (+4.37)(+1.07)

Network break-ins get doused with Check Point Software
Technologies' firewall products -- software that protects
corporate networks from unauthorized access, from both
inside and outside the company. FireWall-1 authenticates
remote users, controls access, and blocks viruses and other
undesirable Web content. Its FloodGate-1 clears up traffic
congestion on crowded Internet and intranet links by
allocating available space to company-defined uses. Check
Point's largest customer is Sun Microsystems' SunSoft, which
accounts for about 20% of sales. Check Point operates
subsidiaries in Europe, North America, and the Pacific Rim.

CHKPF is a company that benefits from the explosion in the
Internet.  As companies increase their use of the web, CHKPF's
services will be needed more and more.  CHKPF has an incredible
record of earning surprises.  Next earnings are scheduled for
January 21st.  Holding over earnings is a risky proposition, but
for those risk takers out there, it might pay off.  There is a
possibility that CHKPF might announce a stock split.  They have
plenty of shares, but have never announced a split in the past.
MACD is positive and CHKPF price is above all moving averages.
Between Tuesday and earnings after the close on Thursday, CHKPF
could have a nice run.

CHKPF, along with other networking security companies, will be
holding a seminar in February. This seminar will outline the
future of the business and the strategies these companies use
and how they can help other companies with their information
security. CHKPF has a consensus growth rate of 37.55%. Watch
for a pullback and hang on for the ride.

BUY CALL FEB-45 KEQ-BI OI= 153 at $8.75 SL= 6.50 ITM $6.25
BUY CALL FEB-50*KEQ-BJ OI=1034 at $5.63 SL= 3.75 ITM $1.25
BUY CALL FEB-55 KEQ-BK OI= 176 at $3.38 SL= 1.75
BUY CALL APR-50 KEQ-DJ OI=  89 at $8.50 SL= 6.50 ITM $1.25
BUY CALL APR-55 KEQ-DK OI=  35 at $6.50 SL= 4.75

Picked on Jan 17th at $ 51.25   PE=22
Change since picked     +0.00   52 week low =$10.88
Analysts Ratings    3-8-3-0-0   52 week high=$52.63
Last earnings   10-98 est=.40   actual=.45
Next earnings   01-21 est=.47   versus=.37
Chart = http://quote.yahoo.com/q?s=CHKPF&d=3m
*******************************************
Semiconductor - Sector
*******************************************
PRIA  PRI Automation, INC. $34.50 (+4.87)

PRIA designs, develops, manufactures, and markets factory
automation systems for the cleanroom manufacturing
operations of semi-conductor makers and OEM equipment
suppliers. Last year's $178.2 million in revenues reflect
the big downturn in the semi-conductor industry, but that
is changing. The 1998 glut of chips has been depleted, and
demand is strong again for these products.

After hitting a high of $37.50 in Feb. 1998, PRIA stock had
lost about 75% of its value by the time the market bottomed
in October. However, it has been climbing fairly steadily
ever since, except for a brief correction in December. With
the chip industry recovering, it follows that a company
such as PRIA will benefit. On January 12th, CIBC Oppenheimer
upgraded PRIA to strong buy from buy. This as a momentum
play in an improving industry.  Earnings due out Jan. 28th.

BUY CALL FEB-30*UXQ-BF OI=176 at $6.38 SL=4.75
BUY CALL FEB-35 UXQ-BG OI= 29 at $3.63 SL=1.75
BUY CALL MAY-30 UXQ-EF OI=107 at $9.00 SL=6.75
BUY CALL MAY-35 UXQ-EG OI= 25 at $6.63 SL=5.00

Picked on Jan 17th  at $34.50        P/E= n/a
Change since picked    $ 0.00        52 week low=  9.56
Analysts' ratings   1-5-4-0-0        52 week high=37.50
Last earnings  9/98 act=-$.20  surprise=99%
Next earnings 01-28 est=-$.26
Chart = http://quote.yahoo.com/q?s=PRIA&d=3m
*******************************************
MU  Micron Technology  $71.31 (+7.68)

Micron makes semi-conductor memory products, PCs, circuit
boards, memory modules, and system level assemblies, and
has a market cap. of $17.6 billion.  Revenues for MU
declined last year due to lower selling prices of PCs and
semi-conductor products. This was a result of too much
product industry wide and too little demand, but the
company is recovering now, as demand increases.

With the industry gaining steam, market expectations for
Micron's earnings were high in December, and the stock
pulled back when MU did not beat analysts' earnings by a
wide enough margin. However, MU has lately begun climbing
again and gathering momentum. Even in this past week's down
market, the stock looked fairly strong. Chip prices climbed
6% last week as Koreans permanently slashed production and
may actually swing the market from an overproduction last
year to a scarcity in the coming year. The wild card in the
future supply is Taiwan. Already, though, chip prices,
which were $200 a year ago, and fell below $60 in May, have
climbed to near $90. At the same time, sales for PCs and
the chips that go in them are showing strong increases, and
that will eventually show up in MU's bottom line. This is a
momentum play.

CBS Marketwatch screened stocks for 20 different
characteristics and MU turned out in the top group. The
five best characteristics: 1)Strong recent earnings/revenue
growth, 2)Selling at a discount to its growth,
3)Consistently beats analysts expectations, 4)Earnings
estimates continually revised upwards, 5)Short- and long-
term relative strength.

BUY CALL FEB-70*MU-BN OI=1757 at $ 7.25 SL= 5.25
BUY CALL FEB-75 MU-BO OI=1109 at $ 5.13 SL= 3.25
BUY CALL APR-70 MU-DN OI= 405 at $11.00 SL= 8.75
BUY CALL APR-75 MU-DO OI= 371 at $ 8.88 SL= 6.75
BUY CALL JUL-75 MU-GO OI= 252 at $12.63 SL=10.25

Picked on Jan  17th at  $71.31         P/E= n/a
Change since picked    $  0.00         52 week low=20.06
Analysts' ratings   10-4-6-0-1         52 week high=71.94
Last earnings  11/98  actual= -.19  surprise=39%
Next earnings  03-22  est   = -.10
Chart = http://quote.yahoo.com/q?s=MU&d=3m
*******************************************
JBL - Jabil Circuit, Inc. $73.88 (-1.00)(+.38)(+2.94)(+3.06)

JBL is the third-largest US manufacturer of circuit board
systems, trailing SCI Systems and Solectron. The company's
products are used in PCs, printers, network hardware, cellular
phones, and cars. JBL's major customers include Hewlett
Packard, 3Com, and Cisco Systems with more than half of its
revenues coming from telecommunications companies.  JBL's
customers use contract manufacturers, like JBL, to save money
and improve production times.  JBL has manufacturing facilities
in Malaysia, Mexico, the UK, and the US.  Insiders own
approximately 41% of the company.

In the news last week, Everen Securities initiated coverage on
JBL with an intermediate term market perform and a long term
outperform.  The press release did note, that in the near-term
they believe that JBL is close to fair value, but in the long
term it should be an outperformer.  The other bit of news that
helped JBL was that Solectron announced a two for one
stock split.  As we have said on more than one occasion, this
industry tends to move together.

Last week, JBL bounced off of its 21 day moving average and
closed right at its 10 day moving average on Friday.  There
also appears to be some support for JBL around $71.  JBL
has been on extended run since last September, and given the
way the sector goes in and out of favor with the Street, you
should keep a close eye on JBL if you are playing it.  If JBL
were to break below $71, in a significant way, we would be very
cautious of the stock.  Also, as with any sector, but more so
with this one, you have to keep an eye on the sector when
playing JBL.

BUY CALL FEB-70 JBL-BN OI=150 at $8.00, SL=6.25
BUY CALL FEB-75*JBL-BO OI=598 at $5.25, SL=3.25
BUY CALL FEB-80 JBL-BP OI=808 at $3.25, SL=1.50
BUY CALL MAR-80 JBL-CP OI=152 at $5.00, SL=3.25
BUY CALL JUN-80 JBL-FP OI=109 at $9.25, SL=6.75

Picked on Dec 6th at  $63.38   PE=33
Change since picked   +10.50   52 week low =$23.00
Analysts Ratings   7-9-5-0-0   52 week high=$79.00
Last earnings  11-98 est=.43   actual=.50
Next earnings  03-17 est=.52   versus=.52
Chart = http://quote.yahoo.com/q?s=JBL&d=3m
*******************************************
Electronics/Peripherals/Hardware  - Sector
*******************************************
LXK  Lexmark Intl. $98.06 (-2.50)(+.06)(+7.25)(+1.31)

Lexmark has good peripheral vision. Lexmark International
Group is a leading maker of computer printers and related
products, which generate more than 80% of its sales. Its
printer line includes laser printers (designed primarily
for corporate networks and desktops) and ink-jet printers
(for home and business use). Unlike many of its competitors,
Lexmark develops and manufactures it's own printers, which
results in fast product cycle times. The company also makes
supplies for IBM and other name brand printers and typewriters.
Lexmark's products are sold in more than 15,000 retail outlets
in more than 150 countries.

LXK consolidated this last week and is sitting right on its
20-dma. We still like LXK with earnings on the 26th of January.
Remember, holding over earnings is risky. In the case of LXK,
the risk might be justified if they announce a stock split.
Each individual has to weigh out the risk themselves.

LXK hasn't had any news the last few days. These last few
weeks have seen LXK get recommended by many different
professionals as a great stock to own for 1999. Remember,
LXK has had an average earnings surprise of 11.75% over the
last four quarters. This could help propel LXK higher before
earnings on the expectation. There are different earnings dates
listed on the web, but First Call does list the 26th of January.
We will continue to try to get a fixed date from investor
relations.

BUY CALL FEB- 95 LXK-BS OI= 53 at $ 9.38 SL=6.75 ITM $3.06
BUY CALL FEB-100*LXK-BT OI=514 at $ 7.38 SL=5.25
BUY CALL FEB-105 LXK-BA OI=284 at $ 5.00 SL=3.25
BUY CALL APR-100 LXK-DT OI= 52 at $11.75 SL=9.25
BUY CALL APR-105 LXK-DA OI= 40 at $ 9.50 SL=7.00

Picked on Dec 15th at    $88.38   P/E = 29
Change since picked:     + 9.68   52 week low =$ 33.63
Analysts' ratings     1-4-1-0-0   52 week high=$103.50
Last earnings  10-98 est= $ .79   actual= $.81
Next earnings  01-26 est= $1.09   prior = $.78
Chart = http://quote.yahoo.com/q?s=LXK&d=3m
*******************************************
EMC - EMC Corporation $100.06 (+6.50)(+8.56)(+3.38)(+.13)

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

There really wasn't any news last week on EMC.  We think the
real story happened on Thursday, when the NASDAQ was down and
EMC went up.  This suggests that there are still a lot of
buyers who want EMC stock.  This was confirmed by the move EMC
made on Friday.  We continue to read  articles that discuss EMC
being in model portfolios of 20 to 30 growth stocks.  There was
an article in MSN MoneyCentral about EMC being one of the top
30 growth stocks.  EMC has been, and is continuing to be, a
great momentum stock.

EMC took off again on Friday.  It set a new 52 week high on
Friday, and closed near the high.  As we discussed above, EMC
is one of those stocks that people keep buying.  As long as
there are buyers of the stock, we believe it will continue with
it's momentum.  EMC is also a split candidate.  We know we keep
saying this, but as it continues to move up, it only increases
the probability of a split.  A year ago this last November EMC
split at around $63 after a strong move.  FYI - EMC reports
earnings before the open on 1/26.

BUY CALL FEB- 95 EMC-BS OI=1072  at $10.75 SL= 8.50
BUY CALL FEB-100*EMC-BT OI=3511  at $ 8.25 SL= 6.25
BUY CALL APR- 95 EMC-DS OI= 540  at $15.50 SL=11.75
BUY CALL APR-100 EMC-DT OI=2619  at $12.88 SL=10.50

Picked on Nov 8th at $69.06     PE=58
Change since picked  +31.00     52 week low =$ 23.50
Analysts Ratings 10-4-0-0-0     52 week high=$100.19
Last earnings  9-98 est=.36     actual=.38
Next earnings  1-26 est=.46     versus=.32
Chart = http://quote.yahoo.com/q?s=EMC&d=3m
*******************************************
XIRC  Xircom Inc. $39.88 (+1.38)(+4.50)(+1.25)

Xircom makes adapters that connect portable PCs to corporate
networks, the Internet, and commercial online services. The
company's products include adapter/modem cards (CreditCard
Ethernet+Modem), network adapters for portable PCs (Pocket
Ethernet Adapter, Pocket Token Ring Adapter), and modem-only
PC cards (CreditCard Modem). Xircom sells its products to
original equipment manufacturers and through a worldwide
network of distributors, value-added resellers, and computer
retailers. Over half of its income is from foreign sales.
Intel owns 11% of Xircom; chairman and CEO Dirk Gates owns
about 5%.

XIRC is expecting to announce earnings that are 300% higher
than the same quarter last year.  With the large earning
surprises XIRC has had the last four quarter, a nice run
could develop into earnings. Though a split isn't likely,
the company has enough shares to announced one. There is
no split history for XIRC.  XIRC reached a new 52-week high
on Friday when it hit $40.50.

XIRC was recently selected as one of the best mobile PC cards.
Its product will be competing with 3COM and a few others for
the best mobile PC card.  This award ceremony is put on the
Mobility Awards. 3COM is one of the biggest competitors of XIRC.

BUY CALL FEB-35 XQR-BG OI= 41 at $6.63 SL=4.75 ITM $4.88
BUY CALL FEB-40*XQR-BH OI=467 at $3.75 SL=2.25
BUY CALL MAR-35 XQR-CG OI=127 at $7.50 SL=5.75 ITM $4.88
BUY CALL MAR-40 XQR-CH OI=116 at $4.88 SL=3.00
BUY CALL JUN-40 XQR-FH OI= 55 at $7.38 SL=5.50

Picked on Jan.9th at    $38.50    PE = 28
Change since picked      +1.33    52 week low =$ 9.25
Analysts Ratings     4-2-1-0-0    52 week high=$40.50
Last earnings on 10-98 est=.25    actual=.33
Next earnings on 01-21 est=.34    versus=.11
Chart = http://quote.yahoo.com/q?s=XIRC&d=3m
*******************************************

PLAYS CONTINUED IN SECTION FOUR.

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

---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
01/18/99 08:27 AM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)
                       01/17/99 06:08 AM

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>
cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Sunday - Option Investor Newsletter 3 of 7 (resend)

The Option Investor Newsletter          1-17-98
Sunday             Part 3 of 7

******************************************
TLAB - Tellabs $85.94 (+11.63)(P3W $10.18)

Tellabs is quickly becoming a powerhouse in the Telecom
equipment industry. With their TITAN and CABLESPAN systems,
and its DXX multiplexers, TLAB is raking in the money from
customers among the telephone companies, cable operators,
and government agencies.  Though they faded from news of
their failed merger of Ciena, Tellabs is still a major
player.

Wow!  What a play.  TLAB gave up only $0.44 in Thursday's
turmoil and came smokin' back $5.25 on Friday to close at
$85.94.  Technicals look outstanding with a small
consolidation already taken place; all indicators in
positive territory.  We introduced the play Thursday under
the following logic: TLAB spiked up $13 last Tuesday to $78
on 11 million shares, $8 higher than resistance previously
set at $70.  TLAB drifted back to $74, then spiked $5 to
$79, on average volume of 3.5 million.  Over the previous 3
trading days, it gained in market weakness while giving
back only $.44 in heavy trading in a downright bearish
market - a terrific sign of strength.  3.5 million shares
traded daily; 147 million shares in float; $3.14 per share
in cash; 34% return on equitystrong fundamentals.  We
expect them to announce more contracts in the coming weeks.
Recent news is capturing investors' eyeballs, making for a
good story.  We could find no news on Friday driving the
price; just market recovery and stock momentum.

Monday, Warburg, Dillion Read raised their rating to a
"buy" citing raised earnings per share estimates to $2.35
and $2.93 from $2.30 and $2.85 for 1999 and 2000,
respectively.  They further state, "fundamentals for the
telecom equipment group has improved over the past few
months which improves visibility for Tellabs" and "Our
checks with Tellabs will report fourth quarter 1998 results
slightly better than our $0.58 earnings per share estimate,
as well as having a positive outlook for 1999" (Reuters).
Also, rumors surfaced last week that TLAB was a targeted
buyout/merger candidate, but were quickly squashed.  Not
soon enough, though, to draw investor attention to the
price move.

BUY CALL FEB-80 TEQ-BP OI=1270 at $ 9.75 SL= 7.25 ATM
BUY CALL FEB-85*TEQ-BQ OI= 965 at $ 7.00 SL= 5.75 OTM
BUY CALL MAR-85 TEQ-CQ OI= 873 at $ 9.38 SL= 7.00 more time
BUY CALL JUN-85 TEQ-FQ OI= 105 at $13.75 SL=11.00 OTM
highest strike available

Picked on Jan. 14th     $80.69          PE= 39
Change since picked     $ 5.25          52 week low =$31.38
Analysts Ratings    15-9-3-0-0          52 week high=$93.12
Last earnings on 09-98 est=.46          actual=.49
Next earnings on 01-25 est=.59          versus=.42
Chart = http://quote.yahoo.com/q?s=TLAB&d=3m
********************************************
QCOM - Qualcomm, Inc. $63.88 (+3.63)

QCOM develops, manufactures, markets, licenses, and operates
advanced communications systems and products based on digital
wireless technology. The Company's primary product areas are
the OmniTRACS system (a geostationary satellite-based,
mobile communications system providing two-way data and
position reporting services), CDMA wireless communications
systems and products and, in conjunction with others, the
development of the Globalstar low-earth-orbit (LEO)
satellite communications system.  The company's CDMA technology
has become the dominant wireless transmission standard in the
US and Korea, and is gaining momentum in a host of other
countries.  Demand for CDMA phones is surging as the US
wireless industry is migrating from analog to digital.

In the news last week, QCOM, along with several other
companies, purchased a concession to operate a fixed line
telephone service in Brazil.  QCOM has indicated, in the past,
that it is lobbying China to adopt its CDMA technology.  Since
1990, the average annual growth rate of mobile phone users in
China has been about 160%, according to government figures.
QCOM is building a global presence.  It was also reported on
CNBC on Friday that there is renewed interest in QCOM as a
takeover candidate given the recent acquisition of ATI and the
LU/ASND merger.  If fact, the entire sector is expecting
another round of takeovers given the competitive landscape.

QCOM has been in a basing pattern since last November.  It
actually fell below its 200 day moving average in December, and
then started its current run around the beginning of the year.
QCOM reports earnings on Tuesday just before the close.  As
you know we don't recommend holding over earnings releases, but
QCOM might make an interesting short term trade before the
earnings release.  Depending on the earnings release on
Tuesday, we also like QCOM as a play after the release given
the merger activity in the sector.  After the earnings release,
wait for a direction before initiating a play.

BUY CALL FEB-60 QAQ-BL OI=1421 at $7.25 SL=5.25
BUY CALL FEB-65*QAQ-BM OI=1224 at $4.38 SL=2.75
BUY CALL FEB-70 QAQ-BN OI= 745 at $2.50 SL=1.25
BUY CALL APR-70 QAQ-DN OI= 401 at $5.13 SL=3.25
BUY CALL JUL-70 QAQ-GN OI=  37 at $7.88 SL=6.25

Picked on Jan 17th at $63.88   PE=22
Change since picked    +0.00   52 week low =$37.75
Analysts Ratings   6-8-6-0-0   52 week high=$67.38
Last earnings  09-98 est=.50   actual=.54
Next earnings  01-19 est=.59   versus=.58
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m
********************************************
NOK.A  Nokia  $138.59 (+$3.59)

Nokia is a supplier of telecommunications systems and
equipment and is the world's leading maker of cellular
phones. It's telecommunications and mobile phone sales are
growing rapidly, and margins are higher as well. Nokia is
increasing plant capacity to keep up with demand.

We covered Nokia from Dec. 13th until Jan. 10th as both a
split candidate and a momentum play. It climbed steadily
for us into the first week of January, when the stock got
ahead of itself. It had risen a little too quickly due to
enthusiasm for the new Euro and to excitement over the ATI
bids. When it began pulling back from its $142.25 close on
Jan.6th, we feared a correction and became reluctant to
recommend new positions, so we dropped it. With yesterday's
$6.34 rebound, the correction appears to be over, and the
stock remains well above its moving averages, so we are
adding it back to our recommended plays. When NOKA
announced a split in Feb. 1998, a long and steep split run
followed. We have been unable to confirm the expected
earnings release date for this foreign owned stock, but we
will keep you posted, as that is a likely time for a new
split announcement.

Since we dropped it, Nokia has entered the pre-paid mobile
phone market in an agreement with Topp Telecom, Inc., of
Miami. Other recent news on this stock can still be found
in previous newsletters posted on the O.I. website. When
researching NOK.A, be aware that some sites require the dot
and some won't allow it.

BUY CALL FEB-135 NAY-BG OI=393 at $11.38 SL= 9.00
BUY CALL FEB-140*NAY-BH OI=241 at $ 8.88 SL= 6.75
BUY CALL APR-135 NAY-DG OI=299 at $17.00 SL=13.00
BUY CALL APR-140 NAY-DH OI=175 at $14.88 SL=11.75
BUY CALL JUL-140 NAY-GH OI= 14 at $ 9.25 SL= 7.00

Picked on Jan 17th  at  $138.59         P/E= n/a
Change since picked       $0.00         52 week low= 35.31
Analysts' ratings    10-6-0-0-0         52 weekhigh=142.50
Last earnings  9/98  est= $ .67  act=$.88  surprise=31%
Next earnings 12/98  est= $1.01
Chart = http://quote.yahoo.com/q?s=NOKA&d=3m
*******************************************
Software - Sector
*******************************************
MSFT - Microsoft $149.75 (-0.13)(+11.19)(-3.06)(P5W +28.13)

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

Extremely volatile, but almost no change from the previous
week.  Price range last week was $136 to $150 on above
average volume for 4 of 5 trading days.  Friday gave us an
$8 gain following the Brazilian downdraft.  CS First Boston
said Microsoft "appears on track" to meet or beat estimate
of 60 cents per share - an increase of 46 percent from the
42 cents in the same quarter last year.  Sales are expected
to increase 21 percent to $4.3 billion.  With conviction,
we still predict a stock split with the earnings
announcement after the close January 19th (MSFT confirmed
this date); only 1 trading day away.  Historically, MSFT
has split like clockwork at $140.  MSFT has expressed
optimism about their future and has every reason to split
the stock.  MSFT is trading just $3 off its all-time high
of $152.50, set the previous week.  Prudential last week
set a price target of $175.  We think their relative price
compared to the market reflects strong investor confidence.
A great play in the making.

Unsavory news release late Thursday: A federal judge
scolded Microsoft Corp. over new contract language
requiring temporary workers to waive any awards from a
pending lawsuit over the software giant's employment
practices (Reuters).  It had no affect on the stock, but
raised eyebrows in the PR department.  Conversely, a new
Microsoft poll shows that 76 percent of American consumers
believe that Microsoft has benefited both U.S. consumers
and the computer software industry (Reuters).  The real
surprise was another press release stating Robert Bork
believes Microsoft should be broken into 3 companies; an
unusual comment from a free market champion, until you
realize he's paid by Netscape to represent them in the
Justice Departments case.  Finally, MSFT appealed the Sun-
Java infringement injunction citing that it believes the
court mistakenly treated the case filed against it by Sun
as a copyright issue, rather than a contract dispute.  We
reiterate, "no material effect on earnings".  Everen
Securities still has their price targets(0-6 months) of
$161 and their long term (6-18 months) of $200

BUY CALL FEB-145 MSQ-BI OI= 7806 at $11.38 SL=9.00 ITM 4.75
BUY CALL FEB-150*MSQ-BJ OI=14655 at $ 8.75 SL=6.50 ATM
BUY CALL APR-155 MSQ-DU OI= 3228 at $10.88 SL=8.75
BUY CALL APR-160 MSQ-DX OI= 3214 at $ 9.25 SL=7.00

Picked on December 8th at $133.63     PE = 70
Change Since Picked      +$ 16.12     52 Week High= 152.50
Analysts Ratings       14-8-5-0-0     52 Week Low =  62.19
Last Earnings 09/98 est. 0.49 actual .56  surprise 14.29%
Next Earnings 01-19 est. 0.58 versus .43

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
*******************************************
CHKPF  Check Point Software $51.25 (+4.37)(+1.07)

Network break-ins get doused with Check Point Software
Technologies' firewall products -- software that protects
corporate networks from unauthorized access, from both
inside and outside the company. FireWall-1 authenticates
remote users, controls access, and blocks viruses and other
undesirable Web content. Its FloodGate-1 clears up traffic
congestion on crowded Internet and intranet links by
allocating available space to company-defined uses. Check
Point's largest customer is Sun Microsystems' SunSoft, which
accounts for about 20% of sales. Check Point operates
subsidiaries in Europe, North America, and the Pacific Rim.

CHKPF is a company that benefits from the explosion in the
Internet.  As companies increase their use of the web, CHKPF's
services will be needed more and more.  CHKPF has an incredible
record of earning surprises.  Next earnings are scheduled for
January 21st.  Holding over earnings is a risky proposition, but
for those risk takers out there, it might pay off.  There is a
possibility that CHKPF might announce a stock split.  They have
plenty of shares, but have never announced a split in the past.
MACD is positive and CHKPF price is above all moving averages.
Between Tuesday and earnings after the close on Thursday, CHKPF
could have a nice run.

CHKPF, along with other networking security companies, will be
holding a seminar in February. This seminar will outline the
future of the business and the strategies these companies use
and how they can help other companies with their information
security. CHKPF has a consensus growth rate of 37.55%. Watch
for a pullback and hang on for the ride.

BUY CALL FEB-45 KEQ-BI OI= 153 at $8.75 SL= 6.50 ITM $6.25
BUY CALL FEB-50*KEQ-BJ OI=1034 at $5.63 SL= 3.75 ITM $1.25
BUY CALL FEB-55 KEQ-BK OI= 176 at $3.38 SL= 1.75
BUY CALL APR-50 KEQ-DJ OI=  89 at $8.50 SL= 6.50 ITM $1.25
BUY CALL APR-55 KEQ-DK OI=  35 at $6.50 SL= 4.75

Picked on Jan 17th at $ 51.25   PE=22
Change since picked     +0.00   52 week low =$10.88
Analysts Ratings    3-8-3-0-0   52 week high=$52.63
Last earnings   10-98 est=.40   actual=.45
Next earnings   01-21 est=.47   versus=.37
Chart = http://quote.yahoo.com/q?s=CHKPF&d=3m
*******************************************
Semiconductor - Sector
*******************************************
PRIA  PRI Automation, INC. $34.50 (+4.87)

PRIA designs, develops, manufactures, and markets factory
automation systems for the cleanroom manufacturing
operations of semi-conductor makers and OEM equipment
suppliers. Last year's $178.2 million in revenues reflect
the big downturn in the semi-conductor industry, but that
is changing. The 1998 glut of chips has been depleted, and
demand is strong again for these products.

After hitting a high of $37.50 in Feb. 1998, PRIA stock had
lost about 75% of its value by the time the market bottomed
in October. However, it has been climbing fairly steadily
ever since, except for a brief correction in December. With
the chip industry recovering, it follows that a company
such as PRIA will benefit. On January 12th, CIBC Oppenheimer
upgraded PRIA to strong buy from buy. This as a momentum
play in an improving industry.  Earnings due out Jan. 28th.

BUY CALL FEB-30*UXQ-BF OI=176 at $6.38 SL=4.75
BUY CALL FEB-35 UXQ-BG OI= 29 at $3.63 SL=1.75
BUY CALL MAY-30 UXQ-EF OI=107 at $9.00 SL=6.75
BUY CALL MAY-35 UXQ-EG OI= 25 at $6.63 SL=5.00

Picked on Jan 17th  at $34.50        P/E= n/a
Change since picked    $ 0.00        52 week low=  9.56
Analysts' ratings   1-5-4-0-0        52 week high=37.50
Last earnings  9/98 act=-$.20  surprise=99%
Next earnings 01-28 est=-$.26
Chart = http://quote.yahoo.com/q?s=PRIA&d=3m
*******************************************
MU  Micron Technology  $71.31 (+7.68)

Micron makes semi-conductor memory products, PCs, circuit
boards, memory modules, and system level assemblies, and
has a market cap. of $17.6 billion.  Revenues for MU
declined last year due to lower selling prices of PCs and
semi-conductor products. This was a result of too much
product industry wide and too little demand, but the
company is recovering now, as demand increases.

With the industry gaining steam, market expectations for
Micron's earnings were high in December, and the stock
pulled back when MU did not beat analysts' earnings by a
wide enough margin. However, MU has lately begun climbing
again and gathering momentum. Even in this past week's down
market, the stock looked fairly strong. Chip prices climbed
6% last week as Koreans permanently slashed production and
may actually swing the market from an overproduction last
year to a scarcity in the coming year. The wild card in the
future supply is Taiwan. Already, though, chip prices,
which were $200 a year ago, and fell below $60 in May, have
climbed to near $90. At the same time, sales for PCs and
the chips that go in them are showing strong increases, and
that will eventually show up in MU's bottom line. This is a
momentum play.

CBS Marketwatch screened stocks for 20 different
characteristics and MU turned out in the top group. The
five best characteristics: 1)Strong recent earnings/revenue
growth, 2)Selling at a discount to its growth,
3)Consistently beats analysts expectations, 4)Earnings
estimates continually revised upwards, 5)Short- and long-
term relative strength.

BUY CALL FEB-70*MU-BN OI=1757 at $ 7.25 SL= 5.25
BUY CALL FEB-75 MU-BO OI=1109 at $ 5.13 SL= 3.25
BUY CALL APR-70 MU-DN OI= 405 at $11.00 SL= 8.75
BUY CALL APR-75 MU-DO OI= 371 at $ 8.88 SL= 6.75
BUY CALL JUL-75 MU-GO OI= 252 at $12.63 SL=10.25

Picked on Jan  17th at  $71.31         P/E= n/a
Change since picked    $  0.00         52 week low=20.06
Analysts' ratings   10-4-6-0-1         52 week high=71.94
Last earnings  11/98  actual= -.19  surprise=39%
Next earnings  03-22  est   = -.10
Chart = http://quote.yahoo.com/q?s=MU&d=3m
*******************************************
JBL - Jabil Circuit, Inc. $73.88 (-1.00)(+.38)(+2.94)(+3.06)

JBL is the third-largest US manufacturer of circuit board
systems, trailing SCI Systems and Solectron. The company's
products are used in PCs, printers, network hardware, cellular
phones, and cars. JBL's major customers include Hewlett
Packard, 3Com, and Cisco Systems with more than half of its
revenues coming from telecommunications companies.  JBL's
customers use contract manufacturers, like JBL, to save money
and improve production times.  JBL has manufacturing facilities
in Malaysia, Mexico, the UK, and the US.  Insiders own
approximately 41% of the company.

In the news last week, Everen Securities initiated coverage on
JBL with an intermediate term market perform and a long term
outperform.  The press release did note, that in the near-term
they believe that JBL is close to fair value, but in the long
term it should be an outperformer.  The other bit of news that
helped JBL was that Solectron announced a two for one
stock split.  As we have said on more than one occasion, this
industry tends to move together.

Last week, JBL bounced off of its 21 day moving average and
closed right at its 10 day moving average on Friday.  There
also appears to be some support for JBL around $71.  JBL
has been on extended run since last September, and given the
way the sector goes in and out of favor with the Street, you
should keep a close eye on JBL if you are playing it.  If JBL
were to break below $71, in a significant way, we would be very
cautious of the stock.  Also, as with any sector, but more so
with this one, you have to keep an eye on the sector when
playing JBL.

BUY CALL FEB-70 JBL-BN OI=150 at $8.00, SL=6.25
BUY CALL FEB-75*JBL-BO OI=598 at $5.25, SL=3.25
BUY CALL FEB-80 JBL-BP OI=808 at $3.25, SL=1.50
BUY CALL MAR-80 JBL-CP OI=152 at $5.00, SL=3.25
BUY CALL JUN-80 JBL-FP OI=109 at $9.25, SL=6.75

Picked on Dec 6th at  $63.38   PE=33
Change since picked   +10.50   52 week low =$23.00
Analysts Ratings   7-9-5-0-0   52 week high=$79.00
Last earnings  11-98 est=.43   actual=.50
Next earnings  03-17 est=.52   versus=.52
Chart = http://quote.yahoo.com/q?s=JBL&d=3m
*******************************************
Electronics/Peripherals/Hardware  - Sector
*******************************************
LXK  Lexmark Intl. $98.06 (-2.50)(+.06)(+7.25)(+1.31)

Lexmark has good peripheral vision. Lexmark International
Group is a leading maker of computer printers and related
products, which generate more than 80% of its sales. Its
printer line includes laser printers (designed primarily
for corporate networks and desktops) and ink-jet printers
(for home and business use). Unlike many of its competitors,
Lexmark develops and manufactures it's own printers, which
results in fast product cycle times. The company also makes
supplies for IBM and other name brand printers and typewriters.
Lexmark's products are sold in more than 15,000 retail outlets
in more than 150 countries.

LXK consolidated this last week and is sitting right on its
20-dma. We still like LXK with earnings on the 26th of January.
Remember, holding over earnings is risky. In the case of LXK,
the risk might be justified if they announce a stock split.
Each individual has to weigh out the risk themselves.

LXK hasn't had any news the last few days. These last few
weeks have seen LXK get recommended by many different
professionals as a great stock to own for 1999. Remember,
LXK has had an average earnings surprise of 11.75% over the
last four quarters. This could help propel LXK higher before
earnings on the expectation. There are different earnings dates
listed on the web, but First Call does list the 26th of January.
We will continue to try to get a fixed date from investor
relations.

BUY CALL FEB- 95 LXK-BS OI= 53 at $ 9.38 SL=6.75 ITM $3.06
BUY CALL FEB-100*LXK-BT OI=514 at $ 7.38 SL=5.25
BUY CALL FEB-105 LXK-BA OI=284 at $ 5.00 SL=3.25
BUY CALL APR-100 LXK-DT OI= 52 at $11.75 SL=9.25
BUY CALL APR-105 LXK-DA OI= 40 at $ 9.50 SL=7.00

Picked on Dec 15th at    $88.38   P/E = 29
Change since picked:     + 9.68   52 week low =$ 33.63
Analysts' ratings     1-4-1-0-0   52 week high=$103.50
Last earnings  10-98 est= $ .79   actual= $.81
Next earnings  01-26 est= $1.09   prior = $.78
Chart = http://quote.yahoo.com/q?s=LXK&d=3m
*******************************************
EMC - EMC Corporation $100.06 (+6.50)(+8.56)(+3.38)(+.13)

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

There really wasn't any news last week on EMC.  We think the
real story happened on Thursday, when the NASDAQ was down and
EMC went up.  This suggests that there are still a lot of
buyers who want EMC stock.  This was confirmed by the move EMC
made on Friday.  We continue to read  articles that discuss EMC
being in model portfolios of 20 to 30 growth stocks.  There was
an article in MSN MoneyCentral about EMC being one of the top
30 growth stocks.  EMC has been, and is continuing to be, a
great momentum stock.

EMC took off again on Friday.  It set a new 52 week high on
Friday, and closed near the high.  As we discussed above, EMC
is one of those stocks that people keep buying.  As long as
there are buyers of the stock, we believe it will continue with
it's momentum.  EMC is also a split candidate.  We know we keep
saying this, but as it continues to move up, it only increases
the probability of a split.  A year ago this last November EMC
split at around $63 after a strong move.  FYI - EMC reports
earnings before the open on 1/26.

BUY CALL FEB- 95 EMC-BS OI=1072  at $10.75 SL= 8.50
BUY CALL FEB-100*EMC-BT OI=3511  at $ 8.25 SL= 6.25
BUY CALL APR- 95 EMC-DS OI= 540  at $15.50 SL=11.75
BUY CALL APR-100 EMC-DT OI=2619  at $12.88 SL=10.50

Picked on Nov 8th at $69.06     PE=58
Change since picked  +31.00     52 week low =$ 23.50
Analysts Ratings 10-4-0-0-0     52 week high=$100.19
Last earnings  9-98 est=.36     actual=.38
Next earnings  1-26 est=.46     versus=.32
Chart = http://quote.yahoo.com/q?s=EMC&d=3m
*******************************************
XIRC  Xircom Inc. $39.88 (+1.38)(+4.50)(+1.25)

Xircom makes adapters that connect portable PCs to corporate
networks, the Internet, and commercial online services. The
company's products include adapter/modem cards (CreditCard
Ethernet+Modem), network adapters for portable PCs (Pocket
Ethernet Adapter, Pocket Token Ring Adapter), and modem-only
PC cards (CreditCard Modem). Xircom sells its products to
original equipment manufacturers and through a worldwide
network of distributors, value-added resellers, and computer
retailers. Over half of its income is from foreign sales.
Intel owns 11% of Xircom; chairman and CEO Dirk Gates owns
about 5%.

XIRC is expecting to announce earnings that are 300% higher
than the same quarter last year.  With the large earning
surprises XIRC has had the last four quarter, a nice run
could develop into earnings. Though a split isn't likely,
the company has enough shares to announced one. There is
no split history for XIRC.  XIRC reached a new 52-week high
on Friday when it hit $40.50.

XIRC was recently selected as one of the best mobile PC cards.
Its product will be competing with 3COM and a few others for
the best mobile PC card.  This award ceremony is put on the
Mobility Awards. 3COM is one of the biggest competitors of XIRC.

BUY CALL FEB-35 XQR-BG OI= 41 at $6.63 SL=4.75 ITM $4.88
BUY CALL FEB-40*XQR-BH OI=467 at $3.75 SL=2.25
BUY CALL MAR-35 XQR-CG OI=127 at $7.50 SL=5.75 ITM $4.88
BUY CALL MAR-40 XQR-CH OI=116 at $4.88 SL=3.00
BUY CALL JUN-40 XQR-FH OI= 55 at $7.38 SL=5.50

Picked on Jan.9th at    $38.50    PE = 28
Change since picked      +1.33    52 week low =$ 9.25
Analysts Ratings     4-2-1-0-0    52 week high=$40.50
Last earnings on 10-98 est=.25    actual=.33
Next earnings on 01-21 est=.34    versus=.11
Chart = http://quote.yahoo.com/q?s=XIRC&d=3m
*******************************************

PLAYS CONTINUED IN SECTION FOUR.

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

---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
01/18/99 08:27 AM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)
                       01/17/99 06:18 AM

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>
cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Sunday - Option Investor Newsletter 5 of 7     (C.Calls/NkdPuts)

The Option Investor Newsletter            1-17-98
Sunday                5  of  7

*****************************************
COVERED CALL SECTION FOR JANUARY 17, 1999
*****************************************
Trading lessons...

This week we are going discuss one of the many pitfalls that you
will eventually encounter as a trader; Incorrect Information...

Occasionally, we will discover an error in a stock or option quote
and usually it comes to us "the hard way". Last week, we offered
a position on Reliance Bancorp (RELY) and it turns out that the
option quoted was for another stock. It was not a research error
or miss-type, just erroneous quote information provided to the
trading public. One of our faithful readers had the unfortunate
experience of buying into this play on the assumption that the
option existed. We received permission to reprint portions of his
remarks to educate our readers. Here is the general narrative;

"I did my 'due diligence' on the options play with Reliance
Bancorp but like a growing number of people this was all handled
on-line with me as the only human in the food chain willing to
take any chances. Oddly though, I did speak to two other people
in this and got an interesting mix of answers.

I used (two common brokerages; names deleted) for my information,
perhaps using two separate entities was my downfall here. One
stated just as you did that there was a Reliance, FEB25-Call at
the same bid as you published. If fact, it showed an array of
options for Reliance. However, come to find out they were Verio.

I then bought shares of Reliance on-line through another broker in
my IRA with the intention of selling calls against them the next
day. When I entered the ticker symbol to 'sell calls to open', I
was greeted by a statement about Verio. Calling the broker, I was
told that the ticker symbol was in fact for Verio but only the Feb.
call. I then contacted the option trading desk and found that the
ticker symbol belonged to Verio and there were no options on RELY
at all. I was fooled by the apparent presence of options at one
brokerage, which tells me that I need to do all my research
through the top name brokerage."

The reader went on to point out that; "It turned out to be the
systems that were fouled up and not the analysis, all information
that is received on-line or through humans should be verified
before investing...I sure plan to do so from now on!"

Words of wisdom for sure!

**************************
SUMMARY OF PREVIOUS PICKS:
**************************

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

DOSE    4.06   7.06  Jan   5.00  0.50  *$  1.44  40.4%  29.3%
ITVU   17.69  24.50  Jan  15.00  3.25  *$  0.56   3.9%  16.9%
APLX    4.94   5.00  Jan   5.00  0.63   $  0.69  16.0%  13.9%
MCHM    8.44   8.63  Jan   7.50  1.38  *$  0.44   6.2%  13.5%
DBCC   17.81  21.75  Jan  15.00  3.63  *$  0.82   5.8%  12.6%
MCHM    8.25   8.63  Jan   7.50  1.63  *$  0.88  13.3%  11.6%
CYCH   20.69  19.75  Jan  17.50  3.63  *$  0.44   2.6%  11.2%
FILE   10.38  11.50  Jan  10.00  1.44  *$  1.06  11.9%  10.3%
NTKI   15.75  15.44  Jan  12.50  4.00  *$  0.75   6.4%   9.2%
CYCH   15.00  19.75  Jan  12.50  3.00  *$  0.50   4.2%   9.1%
NOVT   24.06  25.44  Jan  22.50  2.88  *$  1.32   6.2%   9.0%
WAVO    9.38   9.38  Jan   7.50  2.31  *$  0.43   6.1%   8.8%
SPYG   20.88  18.13  Jan  17.50  4.38  *$  1.00   6.1%   8.8%
BMP    24.56  24.25  Jan  20.00  6.00  *$  1.44   7.8%   8.4%
ITVU   13.25  24.50  Jan  10.00  4.13  *$  0.88   9.6%   8.4%
EGGS   20.88  23.25  Jan  17.50  4.00  *$  0.62   3.7%   8.0%
SYBS    7.81   8.28  Jan   7.50  0.94  *$  0.63   9.2%   8.0%
VRTY   22.50  35.06  Jan  20.00  4.13  *$  1.63   8.9%   7.7%
HDL    12.94  13.13  Jan  12.50  1.44  *$  1.00   8.7%   7.6%
PPRT   13.88  13.13  Jan  12.50  2.25  *$  0.87   7.5%   6.5%
EOG    16.94  16.81  Jan  15.00  2.75  *$  0.81   5.7%   6.2%
PPOD    6.75   8.25  Jan   5.00  2.13  *$  0.38   8.2%   6.0%
MANU   13.75  15.38  Jan  10.00  4.25  *$  0.50   5.3%   5.7%
VIRS   12.75  14.13  Jan  10.00  3.25  *$  0.50   5.3%   5.7%
VOLVY  23.75  27.75  Jan  20.00  4.75  *$  1.00   5.3%   5.7%
DBCC   17.81  21.75  Jan  12.50  5.63  *$  0.32   2.6%   5.7%
MICA   17.13  17.00  Jan  12.50  5.25  *$  0.62   5.2%   5.7%
MWHS   28.38  43.50  Jan  25.00  5.13  *$  1.75   7.5%   5.5%
VSVR   16.75  17.13  Jan  15.00  2.44  *$  0.69   4.8%   5.2%
SDTI   18.31  27.50  Jan  15.00  4.13  *$  0.82   5.8%   5.0%
PTVL   14.69  22.50  Jan  10.00  5.13  *$  0.44   4.6%   5.0%
ABTX   12.69  14.38  Jan  10.00  3.25  *$  0.56   5.9%   4.3%
SER     6.38   6.13  Jan   5.00  1.63  *$  0.25   5.3%   3.8%
CYLKE   4.31   3.81  Jan   5.00  0.50   $  0.00   0.0%   0.0%
TERA    7.88   6.63  Jan   7.50  1.19   $ -0.06  -0.9%   0.0%
IMNR   13.13  10.25  Jan  12.50  2.00   $ -0.88  -7.9%   0.0%
TDFX   16.44  12.38  Jan  15.00  2.44   $ -1.62 -11.6%   0.0%
PSCX   11.31   8.00  Jan  10.00  2.19   $ -1.12 -12.3%   0.0%
-------------------------------------------------------------
TOK     9.75  11.00  Feb  10.00  1.63  *$  1.88  23.2%  14.4%
MCRE    5.38   7.63  Feb   5.00  1.25  *$  0.87  21.1%  13.1%
ARTT    7.38   8.00  Feb   7.50  1.13  *$  1.25  20.0%  12.4%
BID    32.25  32.13  Feb  30.00  5.88  *$  3.63  13.8%   8.5%
DOSE    6.50   7.06  Feb   5.00  2.00  *$  0.50  11.1%   8.0%
SDTI   22.00  27.50  Feb  20.00  4.38  *$  2.38  13.5%   7.3%
PPOD    6.81   8.25  Feb   5.00  2.31  *$  0.50  11.1%   6.9%
ABTE    8.75   9.50  Feb   7.50  1.88  *$  0.63   9.2%   6.6%
GALTF  25.50  26.25  Feb  22.50  5.38  *$  2.38  11.8%   6.4%
CHRX   21.38  21.25  Feb  20.00  3.13  *$  1.75   9.6%   6.0%
NEWZ   11.63  13.00  Feb  10.00  2.44  *$  0.81   8.8%   5.5%
BNYN   14.44  15.75  Feb  10.00  5.13  *$  0.69   7.4%   5.4%
ARTT    7.38   8.00  Feb   5.00  2.75  *$  0.37   8.0%   5.0%
PTVL   22.19  22.50  Feb  15.00  8.13  *$  0.94   6.7%   4.8%
PTVL   18.38  22.50  Feb  12.50  6.88  *$  1.00   8.7%   4.7%
NSTA   26.25  24.00  Feb  25.00  4.13   $  1.88   8.5%   4.6%
OXHP   20.06  18.88  Feb  17.50  3.38  *$  0.82   4.9%   3.6%
OXHP   20.06  18.88  Feb  20.00  2.00   $  0.82   4.5%   3.3%
SYMM    8.56   6.75  Feb   7.50  1.88   $  0.07   1.0%   0.8%

-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).

*** LOSING PLAYS ***

Determining when to exit a play is a matter of personal preference
but we strongly recommended closing any play that falls more than
20% below the initial cost-basis. Some positions may eventually
become profitable but it is generally more productive to exit a
losing play and move your capital into another prospective trade.

**********
NEW PICKS:
**********
Definitions:
OI - Open Interest
CB - Cost Basis (Prc pd - Prm rec'd = CB, the break-even point)
RC  - Return Called
RNC - Return Not Called (Stock Price Unchanged)

********************
Sequenced by Company
********************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

ARTT    8.25  Feb  7.50  AOQ BU  1.44  375    6.81  10.13%  10.13%
BTIM   18.50  Feb 15.00  QBO BC  4.88  109   13.62  10.13%  10.13%
INFS   11.38  Feb 10.00  IQL BB  2.06  147    9.32   7.30%   7.30%
ITVU   24.50  Feb 17.50  QYU BW  8.13  33    16.37   6.90%   6.90%
MCHM    8.75  Feb  7.50   QQ BU  1.94  120    6.81  10.13%  10.13%
MRVT   15.13  Feb 12.50  SQD BV  3.25  35    11.88   5.22%   5.22%
MWY    10.88  Feb 10.00  MWY BB  1.50  537    9.38   6.61%   6.61%
PLCM   25.88  Feb 25.00  QHD BE  3.00  109   22.88   9.27%   9.27%
QNTM   26.88  Feb 25.00  QNQ BE  3.75  4697  23.13   8.08%   8.08%
SPNSF  10.13  Feb 10.00  QHH BB  1.25  372    8.88  12.61%  12.61%

**************************
Sequenced by Return Called
***************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

SPNSF  10.13  Feb 10.00  QHH BB  1.25  372    8.88  12.61%  12.61%
ARTT    8.25  Feb  7.50  AOQ BU  1.44  375    6.81  10.13%  10.13%
BTIM   18.50  Feb 15.00  QBO BC  4.88  109   13.62  10.13%  10.13%
MCHM    8.75  Feb  7.50   QQ BU  1.94  120    6.81  10.13%  10.13%
PLCM   25.88  Feb 25.00  QHD BE  3.00  109   22.88   9.27%   9.27%
QNTM   26.88  Feb 25.00  QNQ BE  3.75  4697  23.13   8.08%   8.08%
INFS   11.38  Feb 10.00  IQL BB  2.06  147    9.32   7.30%   7.30%
ITVU   24.50  Feb 17.50  QYU BW  8.13  33    16.37   6.90%   6.90%
MWY    10.88  Feb 10.00  MWY BB  1.50  537    9.38   6.61%   6.61%
MRVT   15.13  Feb 12.50  SQD BV  3.25  35    11.88   5.22%   5.22%

******************************
Sequenced by Return Not Called
******************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

SPNSF  10.13  Feb 10.00  QHH BB  1.25  372    8.88  12.61%  12.61%
ARTT    8.25  Feb  7.50  AOQ BU  1.44  375    6.81  10.13%  10.13%
BTIM   18.50  Feb 15.00  QBO BC  4.88  109   13.62  10.13%  10.13%
MCHM    8.75  Feb  7.50   QQ BU  1.94  120    6.81  10.13%  10.13%
PLCM   25.88  Feb 25.00  QHD BE  3.00  109   22.88   9.27%   9.27%
QNTM   26.88  Feb 25.00  QNQ BE  3.75  4697  23.13   8.08%   8.08%
INFS   11.38  Feb 10.00  IQL BB  2.06  147    9.32   7.30%   7.30%
ITVU   24.50  Feb 17.50  QYU BW  8.13  33    16.37   6.90%   6.90%
MWY    10.88  Feb 10.00  MWY BB  1.50  537    9.38   6.61%   6.61%
MRVT   15.13  Feb 12.50  SQD BV  3.25  35    11.88   5.22%   5.22%

********************
Company Descriptions
********************
ARTT - Advanced Radio Telecom  $8.25  *** Hot Sector ***

ARTT provides wireless broadband telecommunications services
using microwave transmissions throughout the U.S. Jan 12th
announced operating results: increasing markets; increasing
buildings to which ARTT has access; number of fully connected
buildings has increased; and customer service orders are up.
Climbing above 150 dma on strong volume with short term BUY
signals and good accumulation.

FEB 7.50 AOQ-BU BID=1.44 OI=375 CB=6.81 RC=10.13% RNC=10.13%

Chart = http://quote.yahoo.com/q?s=ARTT&d=3m
********************************************
BTIM - BioTime  $18.50    *** Pharmaceutical/Research ***

BioTime, Inc. is a development stage company which is engaged in
the research and development of aqueous based synthetic solutions
which can be used as blood substitutes. Working on Hextend(r) for
replacing blood volume lost during surgery and trauma without the
risk of contamination by blood borne pathogens. Recently filed to
offer shares through a rights offering to its shareholders and
set 1/5/99 as tentative record date. The offering raises capital
without diluting the existing ownership interests. Short-term
technical support around $15.

FEB 15.00 QBO-BC BID=4.88 OI=109 CB=13.62 RC=10.13% RNC=10.13%

Chart = http://quote.yahoo.com/q?s=BTIM&d=3m
********************************************
INFS - In Focus Systems $11.38  *** Earnings Soon? ***

INFS develops, manufactures and markets multimedia projection
products and service to present video, audio, graphics and data
from personal computers, workstations, VCRs/laser disc players.
No recent news since about mid-Dec. Earnings due on Jan 21.
In a stage II climb on strong volume with recent price spike
(speculation on earnings?). The cost basis is just above support
and this stock is technically, a strong looking long term play.

FEB 10.00 IQL-BB BID=2.06 OI=147  CB=9.32 RC=7.30%  RNC=7.30%

Chart = http://quote.yahoo.com/q?s=INFS&d=3m
********************************************
ITVU - InterVu  $24.50     *** Internet Connections? ***

InterVU, Inc. is a development stage company which utilizes a
proprietary software system for routing and distributing high
quality video over the Internet at high speeds. Leading provider
of video-on-demand and live broadcasts. Recently signed agreements
with OnRadio and INTERVU Inc. Technical short term BUY signals
have triggered, strong volume and BOP, and 6 month support around
our cost basis. Still hasn't filled it's measured gap (climb) last
Friday so we remain cautious with this ITM candidate.

FEB 17.50 QYU-BW BID=8.13 OI=33 CB=16.37 RC=6.90% RNC=6.90%

Chart = http://quote.yahoo.com/q?s=ITVU&d=3m
********************************************
MCHM - MachroChem Corp.  $8.75  *** Pharmaceuticals ***

MacroChem Corp. engages in the development and commercialization
of transdermal drug delivery compounds and systems designed to
promote the delivery of drugs from the surface of the skin into
the skin and bloodstream. The most recent development is the new
preliminary review of a Phase IIB study of Topiglan. This topical
gel formulation of alprostadil for the treatment of male erectile
dysfunction indicates the application is effective in increasing
penile rigidity in patients with significant erectile dysfunction.
Still consolidating around $8.50 as we return for the next month.

FEB 7.50 QQ-BU BID=1.94 OI=120 CB=6.81 RC=10.13% RNC=10.13%

Chart = http://quote.yahoo.com/q?s=mchm&d=3m
********************************************
MRVT - Miravant Medical Tech.  $15.13  *** Pharmaceuticals ***

MRVT is engaged in the research and development of drugs and
medical device products for use in photodynamic therapy, a
procedure which uses light-activated drugs to achieve selective
photochemical destruction of diseased cells. Jan 6 started phase
III clinical trials to treat the advanced form of age-related
macular degeneration (AMD). Just closed above the 150 dma with
technical strength increasing and short-term buy signals evident.

FEB 12.50 SQD-BV BID=3.25 OI=35 CB=11.88 RC=5.22% RNC=5.22%

Chart = http://quote.yahoo.com/q?s=MRVT&d=3m
********************************************
MWY - Midway Games Inc.  $10.88  *** Gaming Sector ***

Midway Games Inc. designs, publishes and markets interactive
entertainment software played in both the coin-operated and
home markets. Earnings are due (tentatively) Jan 22. No recent
news since Dec when a downgrade had negligible effect on price.
In a stage I base since Oct and establishing support above $10.

FEB 10.00 MWY-BB BID=1.50 OI=537 CB=9.38 RC=6.61% RNC=6.61%

Chart = http://quote.yahoo.com/q?s=MWY&d=3m
*******************************************
PLCM - Polycom, Inc.  $25.88  *** Stage 2 ***

Polycom, Inc. develops, manufactures and markets teleconferencing
products that facilitate meetings at a distance. Earnings are due
out this week (20th?). Jan 11, announced Ameritech will now offer
Polycom's ViewStation to its business customers. In a stage II
climb, slightly overextended, but technical strength remains,
suggesting a continuance of the current trend.

FEB 25.00 QHD-BE BID=3.00 OI=109 CB=22.88 RC=9.27% RNC=9.27%

Chart = http://quote.yahoo.com/q?s=PLCM&d=3m
********************************************
QNTM - Quantum Corporation  $26.88  *** Data Storage ***

Quantum Corporation designs, develops and markets information
storage products, including high-performance, high-quality
half-inch cartridge tape drives, tape media, tape autoloaders,
hard disk drives and solid state disk drives. Earnings due out
Jan 20 at 2:15 pm with a conference call following. Upgraded
last Monday. Strong chart/up trend since the beginning of Jan.
Bullish technical characteristics with good support around $24.

FEB 25.00 QNQ-BE BID=3.75 OI=4697 CB=23.13 RC=8.08% RNC=8.08%

Chart = http://quote.yahoo.com/q?s=QNTM&d=3m
********************************************
SPNSF - Sapiens International  $10.13  *** New High ***

SPNSF develops, markets and supports enterprise-wide solutions
for the rapid development of scaleable mission-critical software
applications. For the fiscal year ended 12/31/97, total revenues
rose 14% to $44.6 million. Recently awarded an outsourcing
project valued at several million dollars. Recovered quickly
from Wednesday's market induced drop and quickly surged to a new
52 week high.  Strong technicals suggest that SPNSF is ready to
rally!

FEB 10.00 QHH-BB BID=1.25 OI=372 CB=8.88 RC=12.61% RNC=12.61%

Chart = http://quote.yahoo.com/q?s=SPNSF&d=3m
******************************************************************
CALLS STRICTLY PERCENTAGE LIST
******************************************************************
These Pct are not calculated using margin. These are pure
returns. Margin will increase the percentages. No recommendation
is made on these plays. This is only a numerically produced list
of the options with the highest percentage of return for dollars
invested. If you want to do your own research this is where to
start.

**** this section is no longer emailed but can be viewed in
**** the email version on the website.

******************************************************************
NAKED PUT SECTION FOR JANUARY 17, 1999
******************************************************************
This month, the naked-put portfolio performed very well. Most of
the success was due to the January effect and the bullish movement
of the market after the new year's holiday. Some of the more
successful plays were Internet and Pharmaceutical positions. In
fact, a number of Internet stocks continue to climb as if the sky
had no ceiling. We did have one negative position. Zila fell on
news that Federal advisers recommended against approval of Oratest,
a test to help see cancerous lesions in the mouth. The play should
have been closed for a $0.75 loss.

Brazilian woes continue...

The market is being subdued by the deteriorating situation in
Brazil and no one knows whether this virus will spread like the
Asian Flu. It all stems from the fact that the current world
markets are very susceptible to global meltdown and the closest
thing to a controlling entity is the US government. A serious
situation like the South American financial turmoil won't go away
quickly and although the floating of the Brazilian 'real' should
help the situation in the short-term, it may not prevent trouble
from spreading to other countries. Our economy has never been out
of control but we now face a period of potentially disappointing
earnings reports which will definitely have an effect on the U.S.
stock market in the coming weeks. Good Luck!

*************************
SUMMARY OF PREVIOUS PICKS
*************************

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

MCHM    8.44   8.63  Jan   7.50  0.38  *$  0.38  13.5%  29.4%
ITVU   17.69  24.50  Jan  12.50  0.25  *$  0.25   6.6%  28.7%
SPLN   28.19  31.00  Jan  22.50  0.38  *$  0.38   6.3%  27.4%
DBCC   17.81  21.75  Jan  12.50  0.38  *$  0.38   9.6%  21.0%
ITVU   13.25  24.50  Jan  10.00  0.75  *$  0.75  22.1%  19.2%
CELG   16.69  17.63  Jan  12.50  0.50  *$  0.50  13.0%  18.9%
BTIM   17.38  18.50  Jan  12.50  0.31  *$  0.31   8.2%  17.8%
SPLN   17.19  31.00  Jan  12.50  0.44  *$  0.44  11.3%  16.4%
PTVL   14.69  22.50  Jan  10.00  0.50  *$  0.50  14.5%  15.8%
CDNW   17.25  20.38  Jan  10.00  0.69  *$  0.69  16.7%  14.5%
ITVU   14.00  24.50  Jan  10.00  0.69  *$  0.69  19.8%  14.3%
IGEN   30.63  34.25  Jan  25.00  0.44  *$  0.44   6.2%  13.5%
CDNW   17.63  20.38  Jan  10.00  0.50  *$  0.50  12.4%  13.5%
ZAP    12.38  12.13  Jan   7.50  0.25  *$  0.25   9.2%  13.3%
NOVT   24.06  25.44  Jan  20.00  0.56  *$  0.56   9.2%  13.3%
VRTY   22.50  35.06  Jan  17.50  0.75  *$  0.75  14.3%  12.4%
PDQ    10.38  10.75  Jan   7.50  0.25  *$  0.25  10.7%  11.7%
APM     8.69   7.63  Jan   5.00  0.25  *$  0.25  12.6%  10.9%
ABTX   11.19  14.38  Jan   7.50  0.25  *$  0.25  10.0%  10.9%
NITE   24.00  41.94  Jan  15.00  0.25  *$  0.25   5.0%  10.8%
VIRS   13.13  14.13  Jan  10.00  0.19  *$  0.19   6.7%   9.8%
NXTR   10.13   9.25  Jan   7.50  0.25  *$  0.25  11.0%   9.5%
BMP    24.56  24.25  Jan  17.50  0.44  *$  0.44   8.2%   8.9%
CELG   15.00  17.63  Jan  10.00  0.25  *$  0.25   7.7%   8.4%
SDTI   18.31  27.50  Jan  12.50  0.38  *$  0.38   9.4%   8.2%
TALK   10.13  13.50  Jan   5.00  0.25  *$  0.25  11.0%   7.9%
SDTI   22.00  27.50  Jan  15.00  0.25  *$  0.25   5.4%   7.8%
SRCM   17.19  19.75  Jan  10.00  0.25  *$  0.25   6.8%   7.4%
CELG   11.38  17.63  Jan   7.50  0.25  *$  0.25   9.9%   7.2%
GALTF  22.69  26.25  Jan  15.00  0.38  *$  0.38   7.7%   6.7%
ABTX   12.69  14.38  Jan   7.50  0.25  *$  0.25   9.0%   6.5%
SPYG   20.50  18.13  Jan  12.50  0.31  *$  0.31   7.0%   6.1%
TDFX   16.44  12.38  Jan  12.50  0.31   $  0.19   5.3%   4.6%
TERA    7.88   6.63  Jan   7.50  1.00   $  0.13   3.4%   3.7%
ZILA   10.25   5.69  Jan   7.50  0.38   $ -1.43 -58.8%   0.0%
-------------------------------------------------------------
BNYN   14.44  15.75  Feb  10.00  0.69  *$  0.69  19.3%  14.0%
VIRS   14.63  14.13  Feb  10.00  0.44  *$  0.44  13.1%   9.5%
PCYC   25.38  24.25  Feb  20.00  0.63  *$  0.63  11.1%   8.0%
OXHP   20.06  18.88  Feb  17.50  0.63  *$  0.63  10.3%   7.5%
MUSE   29.38  28.00  Feb  17.50  0.63  *$  0.63   9.7%   7.0%

-ROI is equal to the profit (or loss) divided by the original
 investment requirement (varies broker to broker).
-Monthly ROI represents the return on a monthly basis.
 Example: a 10% return in 20 days equals 15.2% ROI for a month).
-Profit/Loss Column: Asterisk indicates stock price above strike
 price and put option should expire - not be exercised.  Stock
 to be exercised assumed sold at current price.(for tracking)

*********
NEW PICKS
*********
Definitions:
OI  - Open Interest
CB  - Cost Basis (break-even point if put exercised)
ROI - Return On Investment
********************
Sequenced by Company
********************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

PTVL   22.50  Feb 15.00  QUT NC  0.81  48    14.19  15.25%
SCUR   26.00  Feb 20.00  UQU ND  0.56  123   19.44   9.72%
SDTI   27.63  Feb 17.50  QSD NW  0.56  25    16.94   9.20%
SMOD   25.38  Feb 22.50  UYQ NX  1.63  91    20.87  18.31%
SPLN   31.13  Feb 22.50  QSP NX  1.00  40    21.50  13.84%
SRCM   19.75  Feb 15.00   SQ NC  1.06  2     13.94  21.16%
VIRS   14.13  Feb 10.00  VQP NB  0.38  58     9.62  11.85%
WAVO    9.44  Feb  7.50  WKQ NU  0.63  247    6.87  25.02%
*********************************
Sequenced by Return on Investment
*********************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

WAVO    9.44  Feb  7.50  WKQ NU  0.63  247    6.87  25.02%
SRCM   19.75  Feb 15.00   SQ NC  1.06  2     13.94  21.16%
SMOD   25.38  Feb 22.50  UYQ NX  1.63  91    20.87  18.31%
PTVL   22.50  Feb 15.00  QUT NC  0.81  48    14.19  15.25%
SPLN   31.13  Feb 22.50  QSP NX  1.00  40    21.50  13.84%
VIRS   14.13  Feb 10.00  VQP NB  0.38  58     9.62  11.85%
SCUR   26.00  Feb 20.00  UQU ND  0.56  123   19.44   9.72%
SDTI   27.63  Feb 17.50  QSD NW  0.56  25    16.94   9.20%
********************
Company Descriptions
********************
PTVL - Preview Travel  $22.50

PTVL is a provider of branded online travel services for leisure
and small business travelers. Preview Travel has been in a stage
I base since October. Recently corrected after a quick doubling
in price due to the Internet craze. Gaining notice with coverage
initiated by Friedman Billings and now Warburg Dillon Reid. Good
bullish potential with stock above 150 dma and support near $15.

FEB  15.00  QUT-NC  BID=0.81  OI=48  CB=14.19  ROI=15.25%

Chart = http://quote.yahoo.com/q?s=PTVL&d=3m
********************************************
SCUR - Secure Computing  $26.00

Secure Computing Corporation designs, develops, markets and sells
complete network security solutions, including firewalls, filters,
authentication and network services. Earnings are due shortly and
the whisper number is moving higher. SCUR is expected to maintain
a 30-50% growth rate and now option interest is increasing with
rumors of a stock split. Paine Webber reiterated "BUY" rating with
a conservative target of $30.

FEB  20.00  UQU-ND  BID=0.56  OI=123  CB=19.44  ROI=9.72%

Chart = http://quote.yahoo.com/q?s=SCUR&d=3m
********************************************
SDTI - Security Dynamics  $27.63

SDTI provides enterprise network and data security solutions.
The recent lawsuits have been forgotten and analyst upgrades
have had a positive effect. The company started a market trial
program of higher levels of security for customers like IBM and
introduced SecurWorld for delivering two-factor authentication.
A good technical play with Internet bias. Stock price is trading
above all recent resistance and the current trend is bullish.

FEB  17.50  QSD-NW  BID=0.56  OI=25  CB=16.94  ROI=9.20%

Chart = http://quote.yahoo.com/q?s=SDTI&d=3m
********************************************
SMOD - Smart Modular  $25.38

SMOD designs, manufactures and markets memory modules, personal
computer card products and embedded processor modules for the
telecommunication, computer and networking industries. Experts
say the sector is already grappling with the specter of a supply
crunch for DRAM devices. Brisk demand from PC makers may cause a
severe shortage that will result in excessively high premiums for
the technology. We prefer to play based on the support near $20.

FEB  22.50  UYQ-NX  BID=1.63  OI=91  CB=20.87  ROI=18.31%

Chart = http://quote.yahoo.com/q?s=SMOD&d=3m
********************************************
SPLN - Sportsline  $31.13

Sportsline USA, Inc. is an Internet-based sports media company
that provides branded, interactive information and programming
as well as merchandise to sports enthusiasts worldwide. Some say
its #1 in sports information on the Internet and more rumors of
a target-price upgrade. The new issue of the Dines Letter rates
SPLN as one of 4 top Internet stocks to buy now! A steady climb
since mid-Oct and a recent gap-up when the company said it will
post outstanding Q4 revenues, up 90% from a year ago. CBS's new
record-breaking IPO (Marketwatch.com) probably helps this one!

FEB  22.50  QSP-NX  BID=1.00  OI=40  CB=21.50  ROI=13.84%

Chart = http://quote.yahoo.com/q?s=SPLN&d=3m
********************************************
SRCM - SourceMedia  $19.75

SRCM is a provider of information and programming through
the company's proprietary digital operating systems to mass
market consumers. Customers subscribe to Source Media audio
content and have it featured on their web site. The company
launched audio programming with Broadcast.com and says the
Internet audio means it has content on PC's, cable TV and
telephones. A rumored deal with American Online may also be
causing some of the buying pressure and the stock has good
technical support around $15.

FEB  15.00  SQ-NC  BID=1.06  OI=2  CB=13.94  ROI=21.16%

Chart = http://quote.yahoo.com/q?s=SRCM&d=3m
********************************************
VIRS - Triangle Pharm.  $14.13

Triangle Pharmaceuticals is a pharmaceutical company engaged
in the development of new drug candidates primarily in the
antiviral area. Still playing this stock again as it has exited
the tip of the isosceles triangle formation and started to move
higher. Dec 15 entered into definitive purchase agreements to
sell 4.8m newly issued shares of stock to selected investors for
a price of $10. Technically still neutral (basing) to bullish.

FEB  10.00  VQP-NB  BID=0.38  OI=58  CB=9.62  ROI=11.85%

Chart = http://quote.yahoo.com/q?s=VIRS&d=3m
********************************************
WAVO - Wavephore  $9.44

Wavephore is a media content integrator and architect of digital
communications systems. Recently sold $7.5 million worth of its
common stock to a current institutional shareholder at a premium,
thus eliminating any near term financing issues. Also provided a
warrant to the investor to acquire an additional 250,000 shares
at $10.66. The funds will be used for working capital and should
fund existing operations beyond 1999. Good support around $8.

FEB  7.50  WKQ-NU  BID=0.63  OI=247  CB=6.87  ROI=25.02%

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

See Disclaimer in Section One.

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

---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
01/18/99 08:27 AM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)
                       01/17/99 05:32 AM

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>
cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Sunday - Option Investor Newsletter 2 of 7 (calls)

The Option Investor Newsletter              1-17-98
Sunday                   2  of  7

*****************************************************
Coming Events
*****************************************************
Monday:

Nothing

Tuesday:

LJR Redbook       1/16     Forecast:  --     Previous:  2.1%
BTM/Schroeders    1/16     Forecast:  --     Previous:  0.2%
API Oil Stocks    1/16     Forecast:  --     Previous: 321.6M

Wednesday:

Building Permits   Dec     Forecast:  --     Previous: 1.651M
Housing Starts     Dec     Forecast:  1.7M   Previous: 1.649M

Thursday:

Jobless Claims    1/16     Forecast: 325k    Previous: 352K
International Trade Nov    Forecast: -$14.0b Previous: -14.2b
Philadelphia FedIdx 1/11   Forecast:  --     Previous: -3.8

Friday:

None

************************************************************
OIN Spotlight: Naked-Puts...
************************************************************

Another successful segment of the OIN newsletter is the weekly
"Naked Puts" list. This strategy offers an attractive method of
generating small profits on portfolio collateral. A premium is
received for the obligation to buy the underlying security at a
specific price. A successful outcome is achieved if the stock
remains above the sold strike at expiration. It is also one of
the best ways to achieve a technically correct entry position
for owning a stock. This section consistently produces 5%-10%
monthly returns with a high probability of success. Those of
you with large stock portfolios should consider this strategy
for generating extra monthly income.

**** See section five for naked puts ****

*****************************************************
Last weeks change for this weeks picks:
*****************************************************
Index    Last    Week
Dow      9341 -302.77
Nasdq    2348    3.79
$OEX      616  -19.56
$SPX     1243  -31.83
$RUT      427   -4.18
$TRAN    3149 -211.75
$VIX    29.75

Stock   Price   Week

ASND    86.19   14.75 Dropped..play over with LU buyout.
TLAB    85.94   11.63 One week til earnings
SUNW   100.44    9.57 Earnings are on Thursday/ Split candidate
MU      71.31    7.68 Momentum play
ETH     48.94    6.94 Strong momentum after beating estimates
EMC    100.06    6.49 Split Candidate for the 26th
PRIA    34.50    4.87 Recent upgrades
ATI     83.38    4.37 Bought by VOD for $97 a share
CHKPF   51.25    4.37 Earnings surprise expected on the 21st
NOK/A  138.63    3.63 Split Candidate
QCOM    63.88    3.63 Wait until after the earnings report!
DIS     35.75    3.32 Time for a recovery
COF    130.44    3.13 Strong earnings expected Tuesday, Split?
XIRC    39.75    1.37 Large surprise expected on the 21st
DELL    78.94    1.19 Four weeks til earnings
CCU     60.44    0.69 Radio Internet?
MYG     64.25    0.25 Unstoppable machine, making acquisitions
WCOM    75.06    0.06 Done consolidating?
AOL    146.50    0.00 Eight days to earnings/ Split candidate
MSFT   149.75   -0.12 Split Candidate for Tuesday!
T       84.25   -0.82 We want cable modems!
JBL     73.88   -1.01 Profit-taking
FTL     16.50   -1.81 Still a takeover play
LXK     98.06   -2.51 Consistent earnings surprises
LU     110.25   -5.00 Earnings on the 21st.
CSCO   101.69   -5.00 Overreaction is over
UTX    109.50   -5.00 Earnings on Thursday
YHOO   317.00  -26.63 Three weeks left before the split

Puts

RMBS    89.50  -13.38 Earnings warning
XCIT    67.50   -7.50 Internet over extended
CPB     45.13   -7.13 Is it soup yet?
MRK    147.13   -6.68 Drug sector casualty
MCHP    35.13   -5.62 Missed earnings
BAC     64.56   -5.38
WLA     69.81   -3.75 Drug sector casualty
EK      69.00   -3.25 Fuji is winning the war
DD      57.00   -2.50
LLY     81.25   -2.37 Drug sector casualty
BDX     39.75   -1.81 Drug sector casualty
HSY     61.25   -1.75 Still melting
PKN     95.38   -0.56
ERTS    47.00   -0.25
AVT     46.25   -0.19
BMCS    40.06   -0.19

***************************************************
SPECIAL SHORT TERM SPLIT PLAYS (in order by split date)

We always recommend selling the day of the actual
split. 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 !
*****************************************************
YHOO  Yahoo! Inc. $317.00 (-26.63)(+106.69)

See details in sector list

Chart = http://quote.yahoo.com/q?s=YHOO&d=3m
*****************************************************
THE PLAY OF THE DAY -CALLS- ONLY PLAY IN RISING MARKET
*****************************************************
With all the great plays each week we can never decide
on just one so take your pick.

*****************************************************
MSFT - Microsoft $149.75 (-0.13)(+11.19)(-3.06)(P5W +28.13)

Split candidate with earnings - See details in sector list

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
*****************************************************
EMC - EMC Corporation $100.06 (+6.50)(+8.56)(+3.38)(+.13)

Split candidate with earnings - See details in sector list

Chart = http://quote.yahoo.com/q?s=EMC&d=3m
*****************************************************
SUNW - Sun Microsystems $100.44 (+9.56)(+5.25)(+2.32)(+0.62)

Split candidate with earnings - See details in sector list

Chart = http://quote.yahoo.com/q?s=sunw&d=3m
*****************************************************
LU  Lucent Technologies $110.25 (-5.06)(+5.31)(-2.12)

Split candidate with earnings - See details in sector list

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

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

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

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

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

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

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

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

Calls

PRIA - PRI Automation
MU   - Micron Tech
YHOO - Yahoo
NOKA - Nokia
QCOM - Qualcom
TLAB - Tellabs
CSCO - Cisco - back again
CCU  - Clear Channel Comm
ETH  - Ethan Allen
CHKPF- Check Point Software

Puts

EK   - Eastman Kodak
MCHP - Microchip Tech
RMBS - Rambus

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

CALLS:

LOW $50.63(-4.06) We are dropping LOW this week. They have
taken a fall and we don't see any catalyst to continue the
move up.  LOW's has had a nice run. Earnings aren't until
February and we feel there are other picks that will out-
perform.  We are not saying those holding LOW's should sell,
every investor makes their own decision, we just feel it
isn't worthy of a new purchase at this point.

PUTS:

CBE - Cooper Industries  $44.81  (2.69)
Stock rallied sharply on Friday (1/15) after retesting prior
support at $43. Pinnacle dropping CBE after reaching price
target.

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

AOL  - America Online
YHOO - Yahoo
EMC  - EMC Corp
IBM  - Intl Business Machines.
WMT  - Wal-Mart
SUNW - SunMicro Systems
CSCO - Cisco Systems
MYG  - Maytag
NOKA - Nokia
MSFT - Microsoft
LXK  - Lexmark Intl Group Inc

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

GDT  - Guidant Corp    2:1 01-27-99 ex-date 01-28
INKT - Inktomi         2:1 01-27-98 ex-date 01-28
SPLS - Staples         3:2 01-28-99 ex-date 01-29
EGRP - E*Trade         2:1 01-29-99 ex-date 02-01
WIND - Wind River Sys  3:2 02-04-99 ex-date 02-05
FDS  - FactSet Research3:2 02-05-99 ex-date 02-08
MRK  - Merck           2:1 02-16-99 ex-date 02-17
BMY  - Bristol Meyers  2:1 02-26-99 ex-date 03-01
NSOL - Network Solution2:1 02-26-99 ex-date 03-01

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

***************************************
NETWORKING - Sector
***************************************
CSCO - Cisco Systems $101.69 (-5.00)(+13.88)(-1.38)(P6W +29.49)

Cisco is the leading networker and is expected to help
build the next generation Internet. Their goal is to allow
people to access or transfer information without regard to
differences in time, place or type of computer systems,
voice or data.  About 85% of the routers used to decipher
and direct data traffic on the Internet are made by Cisco.

Panic, over-reaction, reality. That best describes CSCO's
trade pattern last week.  We're adding CSCO back after
dropping it from Tuesday's publication.  The market
realized that Lucent's acquisition of Ascend is not the end
of the world for CSCO, sending CSCO back up from its knee-
jerk/market induced sell off. "Often it's the very best
employees who approach Cisco after a takeover.  "That's
wonderful for us and bad for the other guy," said Larry
Lang of CSCO's business services division.  CSCO will
provide the equipment needed for AT&T to offer
TV/phone/internet/data services through (what will be) it's
TCI division.  CSCO is truly leading the development of the
Internet by helping cable and phone companies complete "the
last mile", or the distance between the cable in the street
an your home.  Also making news, this from Newswire, "Cisco
Systems to Invest $6 Million in Technical Support for
China; Technical Assistance Center and Additional Support
Options to Benefit Channel Partners and Customers."

The big picture is that CSCO is due for another split now
that the price is over $100.  Historically, their split
range is $80-$100.  While they have enough shares
outstanding to complete another 3:2 split, a 2:1 would
require the shareholder's to approve more shares.  Next
earnings announcement is scheduled for 2/2 (company
verified); perhaps then we'll get the announcement.  Though
up to $108 the week before, CSCO couldn't hold the gains and
fell with LU/ASND and Brazil news.  Nice recovery back over
$101 on Friday after falling as low as $89 in Wednesday's
sell-off.  A better entry is now available.  Look for
market direction and make your move.

BUY CALL FEB-100 CYQ-BT OI=10339 at $8.75 SL=6.50
BUY CALL FEB-105*CYQ-BA OI=11226 at $6.38 SL=4.75
BUY CALL FEB-110 CYQ-BB OI= 9209 at $4.38 SL=2.75
BUY CALL APR-110 CYQ-DB OI= 3296 at $8.38 SL=6.25

LEAPS:
BUY LEAP JAN-2000-110 LCY-AB at $20.75 SL=16.00
BUY LEAP JAN-2001-110 ZCY-AB at $30.13 SL=23.50

Picked on Oct   8th     $46.69         PE= 113
Change since picked    +$55.00         52 week low =$ 34.31
Analysts Ratings   17-13-0-0-0         52 week high=$108.00
Last earnings on 11-04 est=.33         actual=.34
Next earnings on 02-02 est=.36         versus=.29
Chart = http://quote.yahoo.com/q?s=CSCO&d=3m
*******************************************
Internet - Sector
*******************************************
AOL - America Online $146.50 (+0.00)(-8.63)(+18.50)(P5W+65.06)

America Online is the largest online Internet access
service in the world.  Membership now exceeds 15 million
users.  Its Chairman, Steve Case, said more new users
signed up with AOL on Christmas Day than any other day in
the company's history.  With estimates of 16 million users
by the year 2000 and growing advertising revenues AOL has
been called the blue chip of the Internets. (If only they
could get their mail problem resolved!)

Given Internet weakness last week, it's a wonder AOL
finished even from the previous week.  AOL traded between
$130.00 and $167.  What action!  It finished Friday up
$2.00 on light volume, faring well against significant
losses on other 1st tier Internet stocks.  Consolidation may
be nearing an end as we approach earnings.  At these price
levels, AOL is again well over its historical $120 split
range, though rumors seem to have died for an immediate
announcement.  Currently they have 1.8 bln shares
authorized.  That's enough for a 3:1 split, but a 2:1 is
more likely.  Earnings are on January 27th (company
confirmed).  Look for the split announcement then along
with surprise earnings (as usual).  For the next couple of
days, target shooting your entry may be a safer play.  As
always, confirm market direction first.

Making news this week, AOL stated they expect to close the
Netscape deal by the end of April.  Also, they are
partnering a deal with Bell Atlantic to bring AOL service
at DSL speeds (Digital Subscriber Line-1.5 megs of
bandwidth) to Bell Atlantic customers, putting them in
competition with @Home, another successful cable internet
access service.  DSL service could be available by mid-
Summer (at less than $20 additional per month) and will
cover 15 million homes by the year 2000.  Potential revenue
is huge.  Other DSL agreements are being discussed with
other Baby-Bell regional carriers. Never failing to come up
with new marketing ideas to get subscribers, AOL is taking
its cue from Amway, Mary Kay and Tupperware, and will begin
marketing it's AOL Select service through a multi level
marketing organization called Monument Communications,
based in McLean, VA.

Still an Internet stock.

BUY CALL FEB-140 AOE-BH OI= 3433 at $19.00 SL=14.75,ITM
BUY CALL FEB-145 AOE-BI OI= 2549 at $16.00 SL=12.50,ATM
BUY CALL FEB-150*AOE-BJ OI= 9749 at $13.50 SL=11.25,OTM
BUY CALL APR-145 AOE-DI OI= 1194 at $25.00 SL=19.50,ATM
BUY CALL APR-150 AOE-DJ OI= 3655 at $23.50 SL=18.25,OTM

**Momentum Only, no fundamentals**

Chart = http://quote.yahoo.com/q?s=AOL&d=3m
*******************************************
YHOO  Yahoo! Inc. $317.00 (-26.63)(+106.69)

Yahoo! Inc. is a global Internet media company that offers
a network of branded World Wide Web programming that serves
millions of users daily. As the first online navigational
guide to the Web, WWW.YAHOO.COM is the single largest guide
in terms of traffic, advertising, household and business user
reach, and is one of the most recognized brands associated
with the Internet. The company provides targeted Internet
resources and communications services for a broad range of
audiences, based on demographic, key-subject and geographic
interests.

We are adding YHOO back to the pick list with a precaution:
Wait for a positive confirmation!  YHOO is down over $125 from
its 52-week high.  Of all the Internet stocks, YHOO is the
closest thing to a blue-chip, except for AOL in this list also.
We like the chances that YHOO will turn strongly positive over
the next few weeks leading into it's split.  YHOO showed a classic
example of high expectations when it announced great earnings and
a stock split, yet has fallen drastically.  The internets have
played this game before.  They go in spurts, consolidate and then
take off again.  This is a risky play, but those that are willing
to take the risk, are often rewarded with extraordinary gains.

There are a lot of companies out there trying to duplicate the
success YHOO has had with it's web site.  Many on-line shopping
sites have used YHOO as a model.  Though this seems like it
might eat into YHOO's profits, the fact is that YHOO still leads
the pack.  The more awareness there is for online services, the
more hits YHOO will receive.  These added hits turn into added
advertising revenue which turns into more profits.  Ultimately,
more profits means higher stock prices.

BUY CALL FEB-310 YHV-BB OI= 66 at $45.25 SL=35.00 ITM $7.00
BUY CALL FEB-320 YHV-BD OI=102 at $40.38 SL=31.50
BUY CALL FEB-330*YHV-BF OI=676 at $35.50 SL=27.75
BUY CALL APR-330 YHV-DF OI=682 at $63.75 SL=50.00
BUY CALL APR-340 YHV-DH OI= 13 at $59.38 SL=46.00

Picked on Jan 16th at $317.00   PE=466
Change since picked     +0.00   52 week low =$ 28.81
Analysts Ratings   8-10-5-0-0   52 week high=$445.00
Last earnings   01-99 est=.16   actual=.21
Next earnings   04-12 est=.16   versus=.04
Chart = http://quote.yahoo.com/q?s=YHOO&d=3m
*******************************************
Telecom - Sector
*******************************************
WCOM - MCIWorldCom $75.06 (+0.06)(+3.25)(+1.62)(P4W +7.69)

Telecommunications behemoth, MCIWorldCom, is the recent
offspring between a marriage of formerly #2 long distance
provider MCI and #4 provider WorldCom.  Now the newly
formed giant of giants is duking it out with AT&T as they
stake their claim in the local phone service, international
service, cellular, paging, and Internet access arenas.
WorldCom's $37 billion purchase of MCI last September
qualifies it the 7th largest merger or acquisition in 1998.
WCOM is one of the largest Internet backbone providers in
the world.  If you're reading this letter, somewhere in the
transmission, WCOM fiber brought it to you.

Friday, WCOM gained over $4 from Friday's trading low on
heavy trading - nice comeback.  WCOM is showing a lot of
relative strength.  In last week's action, profits were
shaken out and buyers stepped in.  Though WCOM dipped below
support of $70, they didn't stay there long and finished
each day at no less than $72.  It appears to have
consolidated, and having bounced off its moving average,
should continue upward, market permitting.  Slight
resistance is $76 with harder resistance at $79.  Any
volume or overall market strength should push it right
through.  The markets were not disappointed when WCOM
backed away from bidding on Air Touch, which helped WCOM's
recovery.  We're still big believers in Bernie Ebbers,
WCOM's "awe shucks" chairman.

The big news last week, the U.S. General Services
Administration selected MCI WorldCom to provide long-
distance telephone, data and video telecommunications
services to Federal government agencies worldwide in the
second and final round of its multi(5)-billion dollar
FTS2001 competition.  WCOM is in high-bandwidth content
delivery tests with AOL, which should be successful and
more fully implemented through Bell Atlantic and SBC's DSL
services. With recent court rulings preventing the baby
bells from entering the long distance market in their home
areas, 20% growth in voice traffic and 100% growth in data
traffic every 4 months (!!! Gilder Technology Report) this
spells good news and continued earnings growth for the big
3 long distance providers.

BUY CALL FEB-70 LDQ-BN OI= 2654 at $7.50 SL=5.75,ITM $5.06
BUY CALL FEB-75*LDQ-BO OI=12428 at $4.25 SL=2.50,ATM
BUY CALL FEB-80 LDQ-BP OI=15682 at $2.13 SL=1.00,OTM
BUY CALL MAR-75 LDQ-CO OI= 7534 at $5.75 SL=4.00 lots of time

Picked on November 29th at $62.44       PE = 87
Change since picked       +$12.62       52 week high=79.19
Analysts Ratings       23-9-2-0-0       52 week low =28.00
Last Earnings 10/29 est .22  actual .21  surprise -4.5%
Next Earnings 02/04 est .22  versus .15
Chart = http://quote.yahoo.com/q?s=WCOM&d=3m
*******************************************
T - AT&T $84.25 (-0.81)(+9.31)(+1.19)(+1.56)(P4W +12.06)

AT&T, the mother of all phone companies isn't just a long
distance company any more. Through growth and acquisition,
they now provide data transmission, video tele-
conferencing, PCS/wireless/cellular, Internet, paging and
local phone services via microwave, fiber and copper
infrastructure throughout the U.S. and international
markets.  Their annual revenues in excess of $55 billion
dwarf their nearest competitor, MCIWorldCom, by 5 times.
Their 1998 acquisition of TCG (formerly Teleport
Communications Group, the nations largest competitive local
exchange carrier) and IBM's data services division will add
substantially to their revenues.  Pending a merger with
cable giant, TCI, revenues could grow even more.  Michael
Armstrong, AT&T's CEO, has investors believing that AT&T is
no longer a copper wire dinosaur heading-up the telecom
extinction list.

Great defensive play in the face of market woes last week.
AT&T dipped just below $81 after the open Wednesday, it's
low trading point of the week, but finished up strongly at
$84.75.  Friday's recovery of $2.13 after Thursday's
nosedive to $82.12 came as investor's realized the sell-off
was overdone.  Merrill Lynch upgraded the week before last
to "Long Term Buy".  Technicals are a bit weak in light of
market conditions, but should recover with any market
strength.  Still, the big news:  3:2 stock split to occur
when the TCI deal closes around the end of March (no firm
date yet-we'll let you know the details when available), $4
billion stock repurchase (about 2.7% of shares in float at
current levels) and increased earnings estimates.  With
some of the profits shaken out, a better entry is possible,
but confirm direction before playing.

Not much price moving news this week (other than Brazil).
The week before last, AT&T got the green light to merge
with TCI thus creating a huge bandwidth pipe (lots of
transmission capacity) over "the last Mile" or that short
distance between the street and your phone jack.  It's
estimated that it costs $1200 per home for a typical
utility to trench and install any transmission equipment.
That's why even though the fiber optic cable runs down your
street, you can't yet access it.  It's too expensive to get
it to you.  Soon, you'll be able to bypass that fiber in
favor of AT&T/TCI cable.  It's already there.  Translation:
increased revenues.

BUY CALL FEB-80 T-BP OI= 3679 at $6.88 SL=5.25 ITM 4.25
BUY CALL FEB-85*T-BQ OI= 6666 at $3.63 SL=1.75 ATM,
BUY CALL APR-85 T-DQ OI= 2329 at $6.00 SL=4.25 ATM
BUY CALL JUL-85 T-GQ OI= 1483 at $8.75 SL=6.50 lots of time

Picked on Dec 20th at  $73.00    PE = 22
Change since picked   +$11.25    52 week low = $48.38
Analysts Ratings   9-10-8-0-0    52 week high= $86.75
Last earnings  9-98 est= 1.00    actual= 1.16
Next earnings  1-26 est= 1.00    versus=  .81

Chart = http://quote.yahoo.com/q?s=T&d=3m
*******************************************
ATI  AirTouch Communications $83.38 (+4.38)(+6.56)(+4.56)(+5.19)

AirTouch Communications provides wireless communications to nearly
14 million customers in the US and in 11 countries in Asia and
Europe. Its operations include cellular telephone service (#2 in
the US, after AT&T), paging, and personal communications service
through PrimeCo, its joint venture with Bell Atlantic. AirTouch has
joint ventures in Europe and Asia, including Portugal (Telecel)
and Sweden (Europolitan), where the cellular market is growing
rapidly. It holds a minority stake in the Globalstar satellite
network, which is scheduled to begin providing worldwide digital
phone communications in 1999.

Well, it is finally done. ATI is merging with Vodaphone. The
combined company, to be known as Vodafone AirTouch Plc, will
reach nearly one billion people in 23 countries on four
continents. Serving over 23 million proportionate cellular
and PCS customers, Vodafone AirTouch will be the largest
wireless company in the world by a substantial margin. The
merger is expected to benefit employees, customers and
stockholders. The deal puts ATI shares value at $97 based on
the January 15th close.

If you are not already in ATI, it's too late. ATI will gap open
on Monday.  We will wait and see how the reaction is after
Monday to decide if we should keep ATI long-term.  The only
reason we might keep it is because the deal involves 1 share
of ATI for .5 shares of VOD's ADR share price (plus $9 in cash
per share).  Thus if VOD continues to move up, ATI should
continue to move up too.  ATI is scheduled to announce earnings
on the 22nd of January.

Options will be out of date on the open Tuesday (that means
anything we quote today will probably be $10 too cheap by
Tuesday).  If we keep ATI on Tuesday, we will update the
current option prices.

Picked on Dec.22nd at  $67.88   PE=82 (and rising)
Changed since picked   +15.12   52-week low = $38.25
Analysts Ratings  13-11-4-0-0   52-week high= $83.50 (not for long)
Last Earnings 10-98  est =.26   actual = .30
Next Earnings 01-22  est =.18   versus = .14
Chart = http://quote.yahoo.com/q?s=ATI&d=3m
********************************************
LU  Lucent Technologies $110.25 (-5.06)(+5.31)(-2.12)

Lucent Technologies, Inc. is one of the world's leading
designers, developers and manufacturers of telecommunications
systems, software and products. The Company is a global market
leader in the sale of public telecommunications systems, and
is a supplier of systems or software to most of the worlds
largest network operators. They are also a global market
leader in the sale of business communications systems and
in the sale of microelectronic components for communications
applications to manufacturers of communications systems and
computers.

LU is back!!! After trading as low as $96.00 three days ago,
LU took back over $4 of those losses.  LU took a hit with the
news it was in talks with Ascend.  When the news became reality,
LU has firmed and is heading higher into earnings on the 21st.
LU says the merger will not affect earnings in 1999 and should
help earnings in 2000. It seems the merger is viewed as
positive by the public since LU has trended higher since the
news became official.  There is a possibility that LU could
announce a split with earnings, but the more likely time will
be after the shareholders meeting in February.

Lucent announced a new product for radio.  Lucent Digital
Radio's advancement, called Multi-Streaming, is based on
state-of-the-art capabilities in audio and wireless channel
coding technologies from Lucent's Bell Labs, and allows for
the best-quality FM audio to be delivered over a wide coverage
area, even under impaired channel conditions.

BUY CALL FEB-105 LU-BA OI=2553 at $11.25 SL= 8.75 ITM $5.25
BUY CALL FEB-110 LU-BB OI=5658 at $ 8.63 SL= 6.50
BUY CALL FEB-115*LU-BC OI=6763 at $ 6.25 SL= 4.25
BUY CALL APR-110 LU-DB OI=3654 at $13.13 SL=10.50
BUY CALL APR-115 LU-DC OI=3399 at $10.88 SL= 8.50

Picked on Dec.29th at   $112.06    PE = 53
Change since picked       -1.81    52 week low =$ 34.18
Analysts Ratings     8-9-12-0-0    52 week high=$120.00
Last earnings on 10-98 est= .39    actual=.41
Next earnings on 01-21 est=1.00    versus=.86
Chart = http://quote.yahoo.com/q?s=LU&d=3m
********************************************

SEE DISCLAIMER IN SECTION ONE

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

---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
01/18/99 08:27 AM ---------------------------

	Enron Capital & Trade Resources Corp.

	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)
                       01/17/99 06:27 AM

Please respond to xtrials@optioninvestor.com
To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>
cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)
Subject: Sunday - Option Investor Newsletter 6 of 7 (combos)

The Option Investor Newsletter            1-17-98
Sunday                6  of  7

******************************************************************
COMBINATION PLAYS - MARKET RECAP -Boom or Bust?
******************************************************************

U.S. stocks rallied on Friday, snapping back from the problem of
Brazilian currency devaluation as investors showed new confidence
in the market. The Dow closed up 220 points at 9340.55 and the
Nasdaq was up 71 points at 2348.21. Internet traders were focused
on Marketwatch.com as shares surged 473% and markets around the
world benefited from Brazil's move to let the inflation-busting
real float. The question is: Will the enthusiasm fade next week?

Our new spread plays were all available at favorable prices. The
first candidate was CIEN and a debit price of $3.50 (FEB12C/17C)
was easily attained in the morning trading. SDTI and SRCM went in
different directions but both were still playable. The credit for
the SDTI spread (FEB17P/20P) was slightly less than expected at
$0.50 and SRCM (FEB15P/17P) was right in line at $0.75. SRCM is
primarily a merger-speculation play and without news or continued
rumors, the stock price will drop. Watch it closely! AAPL was our
leg-in play and as recommended, we started with a long position
(FEB35P) at $1.12 and used the afternoon's downward momentum to
increase the price of the short option (FEB37P) to $2.00 for a
credit of $0.87. SUNW was up at the open but favorable positions
were still available at 10:00 AM as the stock price took a quick
breather. The (LJAN100C/FEB100C) calendar spread traded at $14.00.

Friday was expiration day for many of our plays and one of them
was a heart-stopper! Our credit spread on MCHP suffered cardiac
arrest after the company (on Thursday night) reported earnings
that were up from the previous year, but below Street estimates.
Shares fell over $5 in morning trading and although it eventually
went the distance (finishing at $35.12), the prudent exit was at
mid-day for a closing debit of $0.50, to break-even. The rest of
the credit spreads expired safely OTM. Even those that held AAPL
and BMCS to the close were successful.

We are starting to see more progress in the calendar spreads as
some of the positions are "paid for" and many have been moved to
the next higher strike. Our biggest dilemma is the ATI LEAP play
as the company said it agreed to merge with Britain's Vodafone
Group in a stock deal valued at about $56 billion. The merger is
considered valued at $97 per AirTouch common share and we are
curious to see the opening prices on our current positions next
week. Other short positions that were closed include CPQ, NOVL
and WCOM. New options need to be sold on OXHP and WCOM. BGP was
our only dismal failure and there may be some recovery next week.

The debit spreads did better this month, primarily because the
market was so bullish. Our main focus next week is the LU play.
We already have a profit and will plan to exit early on any bump
before the earnings. We are also watching FTL for any further
downward movement and hopefully some new take-over rumors will
surface. Good Luck!
******************************************************************
   - CREDIT SPREAD SUMMARY -
******************************************************************
Stock   Pick     Last      Position   Credit  Cost    G/L   Status

AAS     $59.53    $79.50  JAN70C/65C  $0.68  $0.62   $0.06  Closed
AAPL    $38.00    $41.31  JAN47C/45C  $0.50  $0.25   $0.25  Closed
AAPL    $41.38    $41.31  FEB35P/37P  $0.87  $1.00  ($0.12)  Open
AGPH    $48.93    $58.00  JAN40P/35P  $0.43  $0.00   $0.43  Closed
ALA     $23.19    $24.56  JAN15P/17P  $0.31  $0.00   $0.32  Closed
AOL    $154.62   $146.50 JAN120P/125P $1.25  $0.00   $1.25  Closed
ATHM    $80.25   $102.00  JAN65P/70P  $0.38  $0.00   $0.38  Closed
BMCS    $44.56    $40.06  JAN35P/40P  $0.87  $1.12  ($0.25) Closed
CMGI   $119.87    $96.38  JAN80P/85P  $0.62  $0.00   $0.62  Closed
GT      $52.12    $50.00  JAN65C/60C  $0.43  $0.00   $0.43  Closed
IGEN    $30.62    $34.25  JAN22P/25P  $0.38  $0.00   $0.38  Closed
MCHP    $39.25    $35.13  JAN30P/35P  $0.50  $0.50   $0.00  Closed
SDTI    $25.50    $27.50  FEB17P/20P  $0.50  $0.62  ($0.12)  Open
SRCM    $20.87    $19.75  FEB15P/17P  $0.75  $0.75   $0.00   Open
VNWK    $35.25    $43.50  JAN25P/30P  $0.50  $0.00   $0.50  Closed

Credit spreads are profitable if both positions remain OTM until
expiration. The cost-to-close price can be used to compare the
initial opening credit to the current spread value.
******************************************************************
   - CALENDAR SPREAD SUMMARY -
******************************************************************
Stock   Pick    Last    Position     Debit   Value    G/L  Status

ATI    $64.93  $83.38 LJAN70/FEB75C  $8.50   $8.00  ($0.50)  Open
BGP    $23.19  $18.75    FEB25C      $1.38   $0.25  ($1.12)  Open
CD     $19.93  $20.75 LJAN20/FEB20C  $3.50   $3.62   $0.12   Open
CPQ    $42.68  $46.63 APR45C/FEB45C  $0.00   $1.62   $1.62   Open
DIS    $38.00  $36.00 LJAN40/FEB40C  $4.00   $4.00   $0.00   Open
GM     $71.50  $83.31 MAR70C/FEB75C  $4.50   $4.25  ($0.25)  Open
NOVL   $18.19  $20.06 MAY17C/FEB20C  $1.12   $2.38   $1.25   Open
OHXP   $20.06  $18.88    MAY20C      $2.75   $2.50  ($0.25)  Open
PCS    $21.81  $25.38 MAY22C/FEB25C  $1.50   $3.00   $1.50   Open
SUNW   $94.50 $100.44 LJAN100/F100C $14.00  $14.00   $0.00   Open
T      $79.50  $84.25 FEB80C/JAN80C  $2.31   $6.00   $3.68  Closed
WCOM   $74.25  $75.06    LJAN75     $10.87  $14.38   $3.50   Open

The calendar (or time spread) is profitable if the value of the
position exceeds the initial debit (or cost-basis) at the end of
the expiration period for the long position. However, because we
track the plays based on the current closing cost/value, and some
of the plays have diagonal positions, the gains will rarely be
reflected until the play closes. Each month, as we sell a new call
against the long position, the net cost should decline or position
value should increase.
******************************************************************
    - DEBIT SPREADS -
******************************************************************
Stock   Pick     Last      Position   Debit   Value   G/L   Status

AOL    $146.50  $146.50  FEB155C/160C $2.50  $1.87   $0.62   Open
AOL    $146.50  $146.50  FEB155C/160C $1.50  $1.87   $0.38   Open
BGP     $23.19  $18.75  JAN22C/JAN25C $1.38  $1.75   $0.38  Closed
CIEN    $18.68  $18.94  FEB12C/FEB17C $3.50  $3.25  ($0.25)  Open
FTL     $18.50  $16.69  FEB15C/FEB20C $1.50  $1.62   $0.12   Open
LEVL    $38.00  $38.63  FEB30C/FEB35C $3.25  $3.50   $0.25   Open
LIPO    $14.12  $13.88  JAN12C/JAN15C $1.50  $1.50   $0.00  Closed
LU     $107.87  $110.25 FEB105C/110C  $1.75  $2.50   $0.75   Open
LUV     $26.06  $26.38  FEB22C/FEB25C $1.25  $1.62   $0.38   Open
MTRS    $45.88  $44.13  FEB40C/FEB45C $3.25  $5.00   $1.75  Closed
OXHP    $20.06  $18.88  FEB17C/FEB20C $1.38  $1.12  ($0.25)  Open
OXHP    $20.06  $18.88  FEB17C/FEB20C $1.00  $1.12   $0.12   Open
QNTM    $24.87  $26.88  FEB22C/FEB25C $1.25  $1.38   $0.12   Open
RSLN    $20.68  $20.78  JAN17C/JAN20C $1.75  $2.25   $0.50  Closed

A debit-spread is profitable if the value of the position exceeds
the initial cost of the spread when the play is closed. However,
because we track plays based on the current cost/value, potential
gains may not be reflected until both positions are closed.
******************************************************************
    - DEBIT STRADDLES -
******************************************************************
Stock   Pick     Last    Position   Debit  Value    G/L   Status

JMED   $35.19   $34.50  MAR35C/35P  $5.62  $4.75  ($0.87)  Open
NXTL   $29.68   $28.94    MAY30C    $2.87  $3.38   $0.50   Open

A debit-straddle is profitable when the value of the position
exceeds the initial cost of the spread.
******************************************************************
    - CREDIT STRADDLES -
******************************************************************
Stock   Pick     Last      Position   Credit  Cost    G/L   Status

ESCMF  $10.65   $7.38   JAN10C/JAN10P $2.25  $1.25   $1.00  Closed

A credit-straddle is profitable if the cost to close the position
is less than the initial credit from the spread.
******************************************************************
    - NEW PLAYS -
******************************************************************
ABI - American Bankers Insurance  $48.87     Call Debit Spread

American Bankers Insurance Group (ABIG) sells wholesale, credit
related specialty insurance. Financial institutions, retailers,
automobile and manufactured-housing dealers, and representatives
then retail these policies to consumers. Products include property
insurance (on items ranging from mobile homes to appliances), as
well as life, unemployment, and disability insurance.

Trading in American Bankers Insurance Group options has been brisk
lately following weeks of inactivity as bid speculation reemerges.
Traders cited talk that American International Group, which had
attempted to buy American Bankers last year, (before Cendant Corp
outbid AIG and then pulled out of the deal because of accounting
problems) would return with another offer. Things are heating up
as ING Baring Furman Selz said it resumed coverage of ABI with a
"strong buy" rating. The report says American Bankers is one of
its favorite companies among specialty insurers and states the
company is likely to resume double digit revenue and earnings
growth in the second half of 1999 while earning 15% to 20% on its
equity. The 1999 share price target is $58 and the technical
outlook is favorable.

PLAY (conservative):

BUY  CALL FEB-45 ABI-BI OI=261  A=$5.87
SELL CALL FEB-50 ABI-BJ OI=2612 B=$2.62
NET DEBIT TARGET=$3.00 ROI(max)=33%
INITIAL GTC CLOSING PRICE=$4.25

Chart = http://quote.yahoo.com/q?s=ABI&d=3m
******************************************************************
HUM - Humana Inc.  $19.50     (Neutral) Calendar Spread

One of the largest health care companies in the US, Humana offers
health maintenance organizations (HMOs), preferred provider
organizations (PPOs), and Medicare supplement insurance. They have
about 6 million members and Humana tries to cut costs by offering
physicians incentives and requiring pre-authorization for hospital
inpatient services and outpatient surgery. Medicare accounts for
almost one-third of sales, but Humana is cutting back its Medicare
HMO business. The company markets its products to employers and
other groups, as well as to certain Medicare-eligible individuals.
In the past year, Humana has been the sector's most active merger,
acquisition and divestiture participant as the company moved to
purchase health plans in its largest markets while divesting non-
strategic assets to focus on profitable core businesses.

A Florida appellate court recently ruled that a lawsuit against
Humana could not proceed as a class action and that it should be
dissolved. The opinion strongly supports HUM's contention that
the class action had no merit. This may help investors regain
favor with the company as its likely their business practices have
always been both ethical and legal. The chart reflects a new range
of trading developing near $20 and that makes it perfect for a
calendar spread.

PLAY (conservative):

BUY  CALL MAY-20 HUM-ED OI=567  A=$2.43
SELL CALL FEB-20 HUM-BD OI=1814 B=$1.12
NET DEBIT TARGET=$1.25 TARGET ROI=40%

Note: In the long-term calendar spread, we are reducing the net
cost of the long-term option by the credit from the sale of the
nearer-term call. If the near-term call expires worthless, we will
sell the MAR call to further reduce our debit. If your short-term
position is ITM on the last day of the strike, you need to buy it
back so that you DON'T have to exercise the long-term position. In
that case, your long option is going up in value also and on the
last day of the strike period, the short call will shrink down to
intrinsic value so you will be ahead in the play even after you
buy it back.

Chart = http://quote.yahoo.com/q?s=HUM&d=3m
******************************************************************
GMSTF - Gemstar Intl.  $59.87     Put Credit Spread

GMSTF develops, markets and licenses proprietary technologies and
systems that simplify and enhance consumers' interaction with
electronics products and other platforms that deliver video,
programming information and other data. A recent report rated the
stock "neutral" for conservative investors and "accumulate" for
more aggressive investors based on the company's huge potential
and superior management. A 14 month conservative target price was
set at $57.00. GMSTF also recently filed patent infringement suits
against Scientific Atlanta, Pioneer and General Instrument Corp,
claiming that these companies willfully infringed two (Levine)
patents, by virtue of deployment, marketing, offers to sell and
sale of cable set top boxes containing an interactive program
guide not licensed under these patents. The Levine patents broadly
cover, among others, an interactive program guide using locally
stored or cached data. Gemstar is seeking injunctions and monetary
damages from these companies. Other news includes acquisitions of
VideoGuide and Starsight.

Basically, we favor the technical trading range tops near $45 as
current support for this position but use the downward momentum
by opening the long position first. Then sell the short position
when the stock price firms, to create the credit spread.

PLAY (conservative):

BUY  PUT FEB-40 QLF-NH OI=245 A=$0.68
SELL PUT FEB-45 QLF-NI OI=97  B=$1.06
NET CREDIT TARGET=$0.50 ROI=11%

Chart = http://quote.yahoo.com/q?s=GMSTF&d=3m
******************************************************************
COF - Capital One Finance  $130.43     Put Credit Spread

Capital One Financial Corporation is a holding company, whose
subsidiaries provide a variety of products and services including
credit card products, certain consumer lending, deposit services,
and various operating, administrative and other services. COF is
one of the largest issuers of Visa and MasterCard credit cards in
the United States. Quarterly earnings are due soon and they expect
to exceed analysts' current expectations. The reported earnings
should be approximately 30% higher than 1998 and that is above the
company's long-term objective of 20% earnings growth. Upgraded by
Paine Webber in early January and the stock price is now trading
above all recent resistance at new yearly highs.

PLAY (conservative):

BUY  PUT FEB-105 COF-NA OI=209 A=$1.19
SELL PUT FEB-110 COF-NB OI=61  B=$1.87
NET CREDIT TARGET=$0.81 ROI=19%

Chart = http://quote.yahoo.com/q?s=COF&d=3m
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ELN - Elan Corp  $68.93     Call Credit Spread

Elan Corporation dashingly develops drugs and the delivery systems
that control their absorption. Company subsidiaries include Elan
Pharmaceutical Technologies, which designs oral, microparticulate,
and transdermal (patch) delivery systems; Athena Neurosciences,
which develops drugs for such disorders as Alzheimer's disease;
and Axogen, a research and development (R&D) spinoff. The company
is also bulking up with acquisitions, including Sano Corporation,
Neurex, and Kodak's drug-delivery system maker NanoSystems. Elan
makes some 20 products (including Cardizem CD, marketed by Hoechst
Marion Roussel) sold in more than 45 countries. Based on the news,
lots of drugs and new products in the pipeline. The recent merger
frenzy may have hurt the current bottom-line and investor support
is fading. Just another technical play as this stock has failed
to reach $75 five times in 180 days.

PLAY (conservative):

BUY  CALL FEB-80 ELN-BP OI=0   A=$0.62
SELL CALL FEB-75 ELN-BO OI=229 B=$1.25
NET CREDIT TARGET=$0.75 ROI=18%

Chart = http://quote.yahoo.com/q?s=ELN&d=3m
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INDEX OPTION SPREADS...
******************************************************************
As a trader, you may be familiar with options on individual stocks
where you have the right to buy (call option) or the right to sell
(put option) a particular stock at some predetermined price within
some predetermined time. The buyer has the rights and the seller
the obligations. With index options the basic ideas are the same.
Index options allow you to make investment decisions on a specific
market industry or on the market as a whole. Spread strategies can
be made with index options similar to those made with individual
stock options. Many professional traders employ index spreads as a
hedge strategy. We favor debit positions on the SPX for momentum
and longer-term plays and OTM credit spreads on the OEX when the
risk/reward is favorable. Low ROI disparity spreads will be listed
(when available) for the conservative index trader.
*******************************************************************
OEX - S&P 100 Index  $616.46     OTM Credit-Spreads

The Standard & Poor's 100 Index is a capitalization-weighted index
of 100 stocks from a broad range of industries. The component
stocks are weighted according to the total market value of their
outstanding shares. The impact of a component's price change is
proportional to the issue's total market value, which is the share
price times the number of shares outstanding.

OBSERVATIONS:

For OTM credit spread trades, we like to use the actively-traded
S&P 100 Index options because they contain much more premium than
options on individual stocks and provide an underlying instrument
less prone to huge, gapping moves. Remember however, that you can
always be exercised early so monitor your positions daily.

TECHNICALS:

The overall market seems likely to remain in a wide trading range
over the next few weeks and the long-term outlook is for a two-way
market with somewhat neutral bias. Secondary issues are performing
well but big-caps continue to suffer. The DOW and the S&P 500 both
remain above their 30 wma's and over 50% of all stocks are now in
stage II. The call/put ratio is slightly pessimistic so there may
be some upside testing before any further correction. Review the
OEX trading pit for more specific technical information on the S&P
100 Index.

Bullish...

PLAY (disparity/low ROI):

BUY  PUT FEB-530 OEW-NF OI=992 A=$3.12
SELL PUT FEB-535 OEW-NG OI=68  B=$3.50
NET CREDIT TARGET=$0.38 ROI=8%

PLAY (conservative):

BUY  PUT FEB-570 OEW-NN OI=5024 A=$7.25
SELL PUT FEB-575 OEW-NO OI=507  B=$8.00
NET CREDIT TARGET=$0.75 ROI=17%

Bearish...

PLAY (conservative):

BUY  CALL FEB-670 OEY-BN OI=3332 A=$2.00
SELL CALL FEB-660 OEY-BL OI=4414 B=$3.25
NET CREDIT TARGET=$1.25 ROI=14%

CHART= http://quote.yahoo.com/q?s=oex&d=b?*****************************************************************???*****************************************************?HOW TO SUBSCRIBE?*****************************************************??We would like to have you as a subscriber. You may subscribe?at any time but your subscription will not start until your?free trial is over.??The monthly subscription price is 39.95?The quarterly price is $99 which is $20 off the monthly rate.??************************************************************??To subscribe you may go to our website at??www.optioninvestor.com??and click on "subscribe" to use our secure credit?card server or you may simply send an email to?"subscribe@optioninvestor.com" with your?credit card information,(number, exp date, name)?or you may call us at 303-797-0200 and give us the?information over the phone.??You may also fax the information to: 303-797-1333??*************************************************************?                      DISCLAIMER?*************************************************************?This newsletter is a publication dedicated to the education?of options traders. The newsletter is an information service?only. The information provided herein is not to be construed?as an offer to buy or sell securities of any kind. The?newsletter picks are not to be considered a recommendation?of any stock or option but an information resource to aid the?investor in making an informed decision regarding trading in?options. It is possible at this or some subsequent date, the?editor and staff of The Option Investor Newsletter may own,?buy or sell securities presented. All investors should consult?a qualified professional before trading in any security. The?information provided has been obtained from sources deemed?reliable but is not guaranteed as to accuracy or completeness.?The newsletter staff makes every effort to provide timely?information to its subscribers but cannot guarantee specific?delivery times due to factors beyond our control.???---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on ?01/18/99 08:27 AM ---------------------------?   ?	Enron Capital & Trade Resources Corp.?	?	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)     ?                       01/17/99 05:55 AM?	??Please respond to xtrials@optioninvestor.com?To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>?cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)?Subject: Sunday - Option Investor Newsletter 4 of 7 (calls)????The Option Investor Newsletter             1-17-98?Sunday                4  of  7??************************************************************?DELL - Dell Computer $79.00 (+1.19)(+4.62)(P3W+6.00)??Dell is the largest direct sales PC manufacturer in the?world, listed at 125th in the Fortune-500 and 343rd in the?Global-500 of top companies, with $16.8 billion in sales?over the last 4 quarters. Dell has consistently?outperformed any other major stock for price performance.?Dell is up +1200% in the last five years and has split?their stock five times in the last three years, two times?in 1998 alone.  Dell is a low price, high margin producer?because it has only 6 days of inventory and doesn't have to?pay its suppliers (some who manufacture in Asia) until 8?days later. Since Dell gets paid before it manufactures a?box, they have a huge cash floatcan you say "83% return on?equity?"  In late December, they announced a multi-year?marketing deal with AOL to place AOL on all Dell desktops.?In its server business, Dell managed a 62% year over year?sequential revenue growth.  With over 200 product and?service awards earned during 1998, Dell has not forgotten?its manufacturing and marketing prowess??Veteran readers may recall our obituary to DELL written in?October.  For those who missed it, "It is not often we have?to write an obituary for a great play but for those of us?still in denial, Dell may be dead.  We still think Dell is?a great company.  Great earnings, great sales, growing at?+50%, opening new markets.  We think the problems are?many."  We assumed that the shares in float, now totaling?about 980 million (that's "m", not "b"), had split so many?times, so as to dilute the stock's ability to have big?daily run-ups or even bigger earnings per share surprises.?We reasoned it now takes an additional $10 million of?earnings to create $.01 per share surprise.  Dell used to?surprise us by $.05 routinelypretty hard now to hide $50?million quarterly from Wall Street, especially for an?earnings surprise.  In essence, Dell's ratio of daily?turnover compared to shares in float couldn't move the?price as much.  To add insult to injury, Dell really?flattened out after its last split run to $69, where it?fell back to languish in the $60-$66 range.  In early?November, DELL spiked up  to $72 in anticipation of another?earnings surprise but couldn't hold it after the?announcement.  So we dropped it despite its sound?fundamentals.  Now, Dell's back.??From their 10Q filed with the SEC December 14th, we glean?the following: During the third quarter and first nine?months of fiscal 1999, enterprise unit sales increased 112%?and 165%, respectively, compared to the third quarter and?first nine months of fiscal 1998, and increased?sequentially 13% over the second quarter of fiscal 1999.?Notebook unit sales increased 141% and 123% in the third?quarter and first nine months of fiscal 1999, compared to?the same period of the prior fiscal year, and increased?sequentially 16% over the second quarter of fiscal 1999.?Net revenue increased in all geographic regions in the?third quarter and the first nine months of fiscal 1999 as?compared to the same periods of fiscal 1998. Net revenue?for the third quarter of fiscal 1999 compared to the third?quarter of fiscal 1998 increased 46% in the Americas, 68%?in Europe and 49% in Asia-Pacific and Japan. Net revenue?for the first nine months of fiscal 1999 compared to the?first nine months of fiscal 1998 increased 48% in the?Americas,67% in Europe and 39% in Asia-Pacific and Japan.??Nowadays, this stuff barely makes the news.  We think their?price would be higher if it did.??The first week of January, Dell announced that it will?begin shipping Precision Workstations with the new 450 MHz?Xeon chip, Celeron-based desktops and Genesis chip based?flat screened monitors(reasonably priced too!), all while?cutting the prices of its Precision Workstations by 7.7%.?Last week, they began offering their new Latitude LT ultra-?light notebooks weighing just over 3 lbs.  Over the Holiday?season, industry-wide average selling prices dropped below?$1000; not at Dell. "The high-end has disappeared from?retail, but it hasn't totally gone away. It has gone to?Dell and Gateway," states a Dow Jones article.  Dell?investor relations say that driven by an increase in?industry events, Dell will have more news opportunities?beginning in February. Technicals not so hot after the?Brazil news week.  But even with lack of headline news,?investors are still piling into Dell, up more than $1?during a negative 300 point week on the DOW.??All told (sentiment, business model, recent quiet, earnings?coming) we think Dell is already getting more notice prior?to earnings (scheduled Tuesday, February 16th, after market?close) and will give us that run-up one more time.  Now's?the time to scale into a position??BUY CALL FEB-75 DLQ-BO OI=18306 at $8.38 SL=6.50, ITM?BUY CALL FEB-80*DLQ-BP OI=19747 at $5.63 SL=3.75?BUY CALL MAY-85 DLQ-EQ OI= 9798 at $9.25 SL=6.75??Picked on Jan. 6th at $75.25      PE = 74?Change since picked  +$ 3.75      52 week low =$19.81?Analysts Ratings 12-8-10-0-0      52 week high=$82.25?Last earnings 10/98 est= .27      actual=.28 surprise +3.7%?Next earnings 02-16 est= .31      versus=.20?Chart = http://quote.yahoo.com/q?s=DELL&d=3m?*******************************************?SUNW - Sun Microsystems $100.44 (+9.56)(+5.25)(+2.32)(+0.62)??UltraSPARCs, Netra servers, SPARCstations, and Solaris (for?Unix) are all products of Sun Microsystems.  Sun is also the?creator of the Java computer language.  They are also the?recent partners with AOL in the Netscape merger.??On Wednesday, Sun Microsystems flew up to $104.50 in intraday?trading on false rumors.  By the end on the week, SUNW added?+$9.56 based on facts.  The company is leading the charge into?the future.  This week, SUNW announced many developments?including its end to end computing platform to be used in?telecommunication services, adapted Java to be incorporated?into the digital TV industry, and several other product and?service advancements.  Earnings for SUNW will be reported on?Jan. 21st.  We are predicting a stock split announcement at?that time as well.  If the market conditions continue to?improve like they did on Friday, look for Sun to continue?its upward trek.??Other News:  Morgan Stanley Dean Witter raised its 12-month?price target for SUNW to $132, up from the previous price of?$104.  Scott McNealy, Chairman, CEO, and President of Sun?Microsystems will give his thoughts on the future of network?computing in business in the next century at a seminar called? "PAYMENTS 99: How to Compete and Prosper in the World of?Electronic Commerce" which will be held in April in Atlanta.??BUY CALL FEB- 95 SUQ-BS OI=6524 at $11.00 SL= 8.75?BUY CALL FEB-100*SUQ-BT OI=4610 at $ 8.38 SL= 6.50?BUY CALL APR- 95 SUQ-DS OI=2464 at $15.00 SL=11.75?BUY CALL APR-100 SUQ-DT OI=1867 at $12.50 SL=10.50??Momentum Play??Chart = http://quote.yahoo.com/q?s=sunw&d=3m?*******************************************?Retail  - Sector?*******************************************?MYG - Maytag $64.25 (+0.25)(+1.75)(+0.50)(+1.81)(+1.44)(+1.81)??Maytag manufactures appliances from components made in Asia.?Their component prices have been falling but the prices of?their products have been stable.  They announced record profits?weeks ago as consumers have been buying the new models of their?products in record numbers.  Income rose +50%.  They are also?benefiting from a new distribution agreement with Sears.?Maytag is well positioned to weather any economic slow down?because of its strength in the higher priced market segments?and in commercial products.  Maytag is the stealth play of?the month.  Maytag is not a sexy fast mover and kind of gets?over looked in the winner category.??Wheew!  That was close!  With factors like impeachment and?Brazil rocking the market, we were beginning to think this?would be the week Maytag ended its streak.  But no, our steady?steamer pulled it out on Friday by annexing +$1.00.  It?finished in the green for the eighth consecutive week in a?row.   The turn around on Friday reaffirmed that MYG is still?venturing higher.  Maytag remains a split candidate and?announces their earnings on Feb. 4th.  We are hoping for a?3:2 split, but that might not come until the shareholder?meeting in May.??News on the week:  On Friday, Maytag made one of its rare?appearances in the news.  It signed an agreement to buy Jade?Range, a high-end appliance manufacturer.  Maytag hopes the?addition will augment their ability to develop new ideas and?increase customer satisfaction.??This is a "safe" play but not a fast mover. Options are cheap.??BUY CALL FEB-60 MYG-BL OI= 248 at $5.38 SL=3.75?BUY CALL FEB-65 MYG-BM OI= 478 at $2.13 SL=1.00?BUY CALL APR-60 MYG-DL OI= 619 at $6.63 SL=4.75?BUY CALL APR-65*MYG-DM OI= 560 at $3.75 SL=2.50??Momentum play only??Chart = http://quote.yahoo.com/q?s=myg&d=3m?*******************************************?ETH  Ethan Allen Interiors, Inc. $48.94 (+6.94)(+1.00)??Ethan Allen Interiors manufactures quality home furnishings.?A vertically integrated company, Ethan Allen has three saw-?mills and about 20 furniture factories: These make the?majority of Ethan Allen furnishings that are sold all over?the country through a network of more than 300 stores. Most?of the stores are operated by independent dealers who are?required to deal exclusively in Ethan Allen products and?follow preset guidelines. Products created by the company?include sofas, love seats, area rugs, lighting products,?and floor coverings. Styles featured in Ethan Allen stores?include Formal, American Country, Casual Contemporary, and?Classic Elegance.??ETH has been on a tear lately, going up 8 of the last 9 days.?ETH announced earnings on the 13th, two cents better than?estimates.  This was the 14th consecutive quarter that ETH has?increased its earnings.  ETH is still $18 away from its 52-?week high reached in late March.  We feel with the earnings?announcement momentum, and the strong housing in the U.S.,?that ETH can continue to trade upward.  Next resistance is in?the $52 range.??The only news of late on ETH is the great earnings it posted?on the 13th of January.  Managed stores increased sales by 23%.?Watch for a positive move through the $50-52 range before?initiating new plays.??BUY CALL FEB-45*ETH-BI OI=261 at $5.63 SL= 3.50 ITM $3.94?BUY CALL FEB-50 ETH-BJ OI=216 at $2.69 SL= 1.35?BUY CALL MAY-45 ETH-EI OI= 86 at $7.75 SL= 6.00 ITM $3.94?BUY CALL MAY-50 ETH-EJ OI=  0 at $5.25 SL= 3.50?BUY CALL AUG-50 ETH-HJ OI= 23 at $6.75 SL= 5.00?(50 is highest strike)??Picked on Jan 14th at  $48.94   PE=30?Change since picked     +0.00   52 week low =$23.63?Analysts Ratings    2-8-1-0-0   52 week high=$66.63?Last earnings   01-99 est=.73   actual=.75?Next earnings   04-14 est=.73   versus=.64?Chart = http://quote.yahoo.com/q?s=ETH&d=3m?*******************************************?Miscellaneous  - Sector?*******************************************?FTL - Fruit of the Loom $16.69 (-1.81)??Fruit of the Loom is a global manufacturer of activewear?and casualwear products, men's and boy's underwear, women's?and girl's underwear, infant and toddler wear, printable?outerwear, sportwear.  Under the "Fruit of the Loom" BVD,?Munsingwear, Wilson, Pro Player, Gitano, Best and the?Cumberland Bay labels.??We added FTL last week on very strong rumors of a possible?take over bid coming from an unknown source.  The dollar?figure was for a $23.00 cash buyout. Several times this week,?trading had been halted for large block orders to fill. Giving?us positive feelings of a pending announcement.  After five?days of constant monitoring of the newswires with no results.?We turned to the trusty (yea right) chat rooms.  Just no news?out there on this one.  No one at the Chicago based company?was available for comment.  This begs the question.  Could?this be like your child at play? When it gets too quiet in?the house, could something be up?  Remember, takeover plays?are inherently riskier than most due to their vulnerability?to both bad news or lack of news.??On Friday, even with the unbelievable bounce back of the?markets, FTL did not run with the crowd. Opening at $17.06?then floating to $17.37 through out the day.  It closed just?above its daily low to at $16.69.  Slowing volatility and?decreasing volume could mean caution for players on this?pick.??BUY CALL FEB-15.00 FTL-BC OI= 731 at $3.50 SL=1.75 ITM 1.69?BUY CALL FEB-17.50*FTL-BW OI=1986 at $2.18 SL=1.00?BUY CALL MAY-15.00 FTL-EC OI= 147 at $4.50 SL=2.75?BUY CALL MAY-17.50 FTL-EW OI= 238 at $3.25 SL=1.50??Takover play -??Chart = http://quote.yahoo.copm/q?s=FTL&d=3m?*******************************************?COF  Capital One Financial $130.44 (+3.13)(+12.31)??Capital One Financial, a financial services holding company,?is the parent for Capital One Bank, one of the US's top 10?credit card companies. Using the information on consumers in?its massive databases, the company solicits Visa and?MasterCard customers by mail. The company's 3,000 variations?of annual percentage rates, credit limits, finance charges,?and fees range from platinum and gold cards for preferred?customers to secured and unsecured cards for customers with?limited credit histories. Other subsidiaries include a?federally chartered savings bank that offers credit cards,?consumer lending, and deposit services and a company that?provides internal support services.??COF had a pretty good comeback on Friday with a gain of $3.25.?Earnings are scheduled for the 19th of January and there is a?decent chance that a split could be announced.  COF is trading?near its all-time highs, but has no history of splits. Once?again, there is a large risk associated with holding over?earnings.  However, COF is expected to turn in some strong?numbers.??Preliminary numbers for credit card numbers are looking very?positive for the holiday season. An analyst at JP Morgan feels?that COF outperformed its peers. An analyst at Goldman Sachs?stated; "The combination of strong fees driven by account?growth improvement in core credit is likely to produce very?strong earnings visibility at both Capital One and Providian."?Earnings are expected to come in strong.??BUY CALL FEB-125 COF-BE OI=124 at $12.00 SL= 9.50 ITM $5.44?BUY CALL FEB-130*COF-BF OI=218 at $ 9.38 SL= 7.00?BUY CALL FEB-135 COF-BG OI= 84 at $ 7.13 SL= 5.25?BUY CALL MAR-135 COF-CG OI=  0 at $ 9.63 SL= 7.00 (NEW STRIKE)?BUY CALL JUN-135 COF-FG OI= 10 at $16.00 SL=12.5O (NEW STRIKE)??Picked on Jan 14th at $127.18   PE=30?Change since picked     +3.26   52 week low =$ 50.56?Analysts Ratings    9-4-3-0-0   52 week high=$132.50?Last earnings  10-98 est=1.00   actual=1.00?Next earnings  01-19 est=1.04   versus= .86?Chart = http://quote.yahoo.com/q?s=COF&d=3m?*******************************************?DIS - Disney $35.75. (+3.32)??Striving to be the premier entertainment company, Disney?has revenues of $10,055.1 million. It is involved in?movies, television, theme parks and resorts, home video,?travel, books, music, theater, and creative design.?Recently, It has added an Internet portal in a joint?venture with Infoseek, in which it has a 43% stake.??The past year has been tough for Disney, due to high?programming costs at its ABC division, and to weak demand?for its products in Asia. On Jan. 13, Brown Brothers?lowered its short term view of DIS from buy to neutral, but?raised its long view from neutral to buy. Last week Merrill?Lynch's Jessica Reif Cohen lowered earnings estimates for?the current fiscal quarter from .27 to .23, and for the?fiscal year ending Sept. 1999 from .91 to .86. She cited?softness in consumer products and broadcasting operations,?and continued weakness in Asia. However, three other?analysts believe the stock is oversold and that DIS is?experiencing a recovery. On Jan.12th, Goldman Sachs raised?their rating from Neutral to Outperform, and Soloman Smith?Barney raised theirs from Neutral to Buy. On Jan. 11th, ING?Baring Furman Selz upgraded DIS to Buy from Hold. On Jan.?12th, Disney and Infoseek launched their new Internet portal?site, Go Network (www.go.com). Numbers show that it will be?one of the top 5 sites on the Internet. Following the?upgrades and the new portal launch, Disney stock has?performed well. Its chart looks good and it has pushed?through the major moving averages. Although it was down?yesterday along with a lot of other stocks, and slightly?lower today, it is still up $3.32 for the week.??Disney's ABC division has worked out final details for?2,000 production and technical workers to return to work?following a lockout that began after a one day strike on?Nov. 3rd. The union agreed to give a warning before going on?strike. Their contract had expired in 3/97. The company has?named Thomas Schumaker a new president and put him in?charge of its animated movie and theater business. Also,?DIS may be interested in Livent Inc., a theater company.?With the market heating up again, Disney shouldn't be far?behind.  Earnings are expected Jan.27th.??BUY CALL FEB-35*DIS-BG OI=2761 at $3.00 SL=$1.50?BUY CALL FEB-40 DIS-BH OI=1689 at $ .81 SL=$0.00?BUY CALL APR-35 DIS-DG OI=8078 at $4.00 SL=$2.50?BUY CALL APR-40 DIS-DH OI=6098 at $1.94 SL=$1.00?BUY CALL JUL-40 DIS-GH OI=1057 at $3.25 SL=$1.50??Picked on Jan 14th at   $36.06         P/E=33?Change since picked:     -.31         52 week low= $22.50?Analysts' ratings 2-10-11-0-0         52 week high=$42.78?Last earnings    9/98 est=.15 act=.16  surprise=7%?Next earnings   01-27 est=.26 versus .36?Chart = http://quote.yahoo.com/q?s=DIS&d=3m?*******************************************?UTX - United Technologies Corp. $109.69 (-5.00)(+5.94)??UTX makes a variety of products, from elevators to air?conditioners. Its subsidiary Carrier is the world's largest?maker of heating and air-conditioning systems.  It manufactures?and services heating, ventilating, and refrigeration equipment.?UTX's Otis is the world's #1 elevator manufacturer; it also?makes and services escalators, moving sidewalks, and shuttle?systems.  Its subsidiary Hamilton Standard produces engine?controls, environmental systems, propellers, and other flight?systems. Another subsidiary Pratt & Whitney makes engines for?both commercial and military aircraft.  The company's Sikorsky?unit makes helicopters??We are amazed at the number of varied businesses of UTX.  For?example, last week UTX announced that its Hamilton Standard?unit signed a letter of intent to joint venture with KLM Royal?Dutch Airlines to focus on the maintenance of pneumatic?aircraft components.  In the press release it indicated that?its Hamilton unit also makes space suits for the NASA shuttle?program.  Otherwise, if you look at the new clipping services?such as Yahoo!Finance, the clippings all involve the movement?of the Dow.  UTX is a Dow 30 component.  Last split was 12/96?in the $130 to $140 range, but this was after a strong run up?from the announcement.  There is a possibility of another?split announcement with earnings on Thursday.  UTX has enough?shares for a 2:1.??You might be asking yourself, why we are leaving UTX on the?current play list.  It closed a below its 10 day moving average?and doesn't look like a healthy momentum stock.  We are leaving?it on the play list because it is very Dow reactive.  If we get?a good move in the Dow, UTX could be a good play.  UTX's beta?is 1.10.  Last week, however, the Dow dropped 3.13% and UTX?dropped 4.36%.  This would make its beta, for last week, equal?to 1.4.  Therefore, if the Dow makes a nice move up next week,?UTX may make a good play.  Remember, UTX reports earnings on?1/21, and we don't recommend holding over earnings release?dates unless you think the stock will split.  This is a tough?call but the safe move is to avoid it.??BUY CALL FEB-110 UTX-BB OI=164 at $4.75 SL=3.25?BUY CALL FEB-115*UTX-BC OI=184 at $2.63 SL=1.25?BUY CALL MAY-110 UTX-EB OI= 96 at $8.13 SL=6.25?BUY CALL MAY-115 UTX-EC OI=190 at $6.00 SL=4.25??Picked on Jan 10th at $114.69   PE=22?Change since picked     -5.00   52 week low =$ 67.00?Analysts Ratings    8-4-4-0-0   52 week high=$115.81?Last earnings  09-98 est=1.36   actual=1.41?Next earnings  01-21 est=1.11   versus= .97?Chart = http://quote.yahoo.com/q?s=UTX&d=3m?*******************************************?CCU - CLEAR CHANNEL COMMUNICATIONS 60.44 (+0.69)??Clear Channel Communications is a diversified media company?that owns or programs radio and television stations and is?one of the largest domestic outdoor advertising companies?based on its total advertising display faces.  Currently they?own stations located principally in the South, Southeast,?Southwest, Northeast and Midwest, employing a wide variety?of programming format, such as News/Talk/Sports, Country,?Adult Contemporary, Urban and Album Rock.??Recommending a communication company with radio stations,?while the technical stocks, especially the Internet area is?in everyone's gun sites?  Yep, read on.  CCU this week, joined?a consortium of other communication companies; Jaycor,?Chancellor, Heftel broadcasting, just to name a few.?This group has been investing in a Maryland company, USADigital?Radio Inc.  USADigital is developing a crystal clear digital?signal.  This CD-quality sound along with the digital technology?would allow the radio stations (you guessed it) to offer?e-mail, Internet access and other data services over existing?airwaves.??On January 4th, CCU bounced off of support of $52.00.  Then?raced towards it's resistance of $60.00 on January 8th. It then?retraced to $55.50 and as of Friday, closed over its $60.00?resistance giving it new support at $60.00 for the coming week.?Watch for a strong opening on Tuesday, but don't be fooled.?Wait for a little pull back and positive movement before?taking this one on.??BUY CALL FEB-55 CCU-BK OI= 484 AT $7.37 SL=5.50?BUY CALL FEB-60*CCU-BL OI= 220 AT $4.00 SL=2.50?BUY CALL FEB-65 CCU-BM OI= 331 AT $2.12 SL=1.00?BUY CALL APR-60 CCU-DL OI=  52 AT $6.00 SL=4.25?BUY CALL APR-65 CCU-DM OI= 214 AT $4.25 SL=2.50??Picked on Jan. 17 at $60.44     PE=208?Change since picked    0.00     52 week low =$31.00?Analysts Ratings 12-2-3-0-0     52 week high=$62.31?Next earnings 02-10 est=.09     versus=.-18?Chart = http://quote.yahoo.com/q?s=CCU&d=3m?*************************************************************???*************************************************************?                      DISCLAIMER?*************************************************************?This newsletter is a publication dedicated to the education?of options traders. The newsletter is an information service?only. The information provided herein is not to be construed?as an offer to buy or sell securities of any kind. The?newsletter picks are not to be considered a recommendation?of any stock or option but an information resource to aid the?investor in making an informed decision regarding trading in?options. It is possible at this or some subsequent date, the?editor and staff of The Option Investor Newsletter may own,?buy or sell securities presented. All investors should consult?a qualified professional before trading in any security. The?information provided has been obtained from sources deemed?reliable but is not guaranteed as to accuracy or completeness.?The newsletter staff makes every effort to provide timely?information to its subscribers but cannot guarantee specific?delivery times due to factors beyond our control.??---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on ?01/18/99 08:27 AM ---------------------------?   ?	Enron Capital & Trade Resources Corp.?	?	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)     ?                       01/17/99 06:47 AM?	??Please respond to xtrials@optioninvestor.com?To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>?cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)?Subject: Sunday - Option Investor Newsletter 7 of 7 (puts)????The Option Investor Newsletter             1-17-98?Sunday                7  of  7??*************************************************************?PUTS, PUTS, PUTS?*************************************************************?Put plays can be very profitable but have a larger risk than?call plays. When a stock is falling the entire investment?community (except the shorts) is hoping it will reverse and?start back up. The company management is also doing everything?they can to shore up their stock price. The company issues?press releases, brokers talk it up, analysts try to put a?positive spin on everything. Then of course there is the death?knell, the "buy recommendation" simply because the price has?dropped to some level that analysts feel attractive again.?Buyers who like the stock wait until it appears a bottom has?been reached and then jump on it in a feeding frenzy. They may?already have a large position and are averaging down. Many?factors can stop a free falling stock in mid drop.???Recommended Puts?*************************************************************?New Recommendations at a Glance:??EK   - Eastman Kodak     - $69.00  (-3.25)?MCHP - Microchip Tech    - $35.13  (5.62)?RMBS - Rambus            - $89.50  (-13.38)???Current Recommendations at a Glance:??AVT  - Avnet, Inc.       - $46.25  (.19)?BAC  - Bank of America   - $64.56  (5.38)?BDX  - Becton, Dickinson - $39.75  (1.81)?BMCS - BMC Software      - $40.06  (.19)?CPB  - Campbell Soup     - $45.13  (-7.12)?DD   - DuPont de Nemours - $57.00  (2.50)?ERTS - Electronic Arts   - $47.00  (.25)?HSY  - Hershey Foods     - $61.25  (1.75)?LLY  - Eli Lilly         - $81.25  (-2.37)?MRK  - Merck             - $147.13 (-6.68)?PKN  - Perkin-Elmer      - $95.38  (-.55)?WLA  - Warner Lambert    - $69.81  (3.75)?XCIT - Excite, Inc.      - $67.50  (7.50)???Dropped Plays:?Cooper Industries (CBE)  - $44.81  (2.69)???Failed Rallies:?*****??EK - Eastman Kodak - $69.00 (-3.25)?Consumer??Company Description:?Eastman Kodak Co. primarily develops, manufactures and markets?consumer and commercial imaging products. For the nine months?ended 9/98, revenues fell 7% to $10.08 billion. Net income?increased 49% to $1.12 billion. Revenues suffered from?decreased selling prices, unfavorable effects of foreign?currency rate changes, and the transfer of a portion of the?graphics business to a joint venture.??Play Description:??Kodak struggling to overcome cost cutting, digital imaging,?pricing pressures on film, (and) problems in the copier?business. Average price for a film roll fell about 13 percent?in the fourth quarter from a year ago, and was down five?percentage points from the third quarter. Kodak also?struggling to hold its U.S. market share. Pacific Rim,?Latin America and Russia are under enormous duress, 99?earnings consensus now lower than the previous estimate?of $5.20 per share. Stock now trading below the 200 moving?day average and likely to test prior lows at $55.??Play: Failed Rally??BUY PUT FEB-70 EK-NN OI=836 @ $3.50 SL=2.00??Chart = http://quote.yahoo.com/q?s=ek&d=3m?*****??Microchip Tech (MCHP) - $35.13 (-4.63)?Semiconductor??Company Description:?MCHP develops, manufactures and markets programmable 8-bit?microcontrollers, application specific standard products?and related specialty memory products for consumer,?automotive, office automation, industrial and communications?markets.??Play Description:?Microchip is struggling to restructure its operations to try?to eliminate the company's older, less-efficient manufacturing?capacity and to manage inventory levels. Analysts recently cut?estimates for fiscal 99 and 00. Microchip's December quarter?was characterized by continued low order visibility, along with?some weakness in end-of-quarter turns order shipments, Stock?recently gapped off of failed rally point of $40 and may test?prior lows in the $20s??BUY PUT FEB-40 QMT-NH OI=37 @ $6.63 SL=4.25?BUY PUT FEB-35 QMT-NG OI=21 @ $3.25 SL=2.00??Chart = http://quote.yahoo.com/q?s=mchp&d=3m?*****??RMBS - Rambus  - $89.50 (-8.50)?Semiconductor??Company Description:?Rambus designs, develops, licenses, and markets high speed?chip to chip interface technology to enhance the performance?and cost-effectiveness of computers, consumer electronics and?other electronic systems. Rambus has been viewed as a hot growth?company because users want high-speed graphics -- and its stock?has soared from its $12 offer price just over a year ago. But?its lack of progress in the personal computer market has tied?its earnings to the cycles of highly seasonal video games, sold?mostly in the Christmas season. Instead of an anticipated lift?to earnings this year, the personal computer segment will consume?additional expenses over the next few quarters as it tries to move?upstream into the PC main memory market.??Play Description:?Investor disappointment relates to appreciably slower earnings?growth now anticipated for DRAM chip enhancement technologies?developer over the next few quarters. Expected seasonal?decline in royalties from shipments of Rambus-enhanced chips?used in Nintendo 64 video games, among other things will?temper EPS figures for balance of year -"no better than?flat" compared with fiscal first quarter results. Year-over?year earnings growth now estimated at about 14%, well off the?43% hoped for by analysts. Stock likely to trade back to?support levels at 200 day moving average at around $65 after?a failed rally at $99.??Play: Failed Rally??BUY PUT FEB-90 BNQ-NR OI=225 @ $10.00 SL=7.25?BUY PUT FEB-85 BNQ-NQ OI=1665 @ $7.38 SL=5.00??Chart = http://quote.yahoo.com/q?s=rmbs&d=3m?*****??AVT - Avnet, Inc. - $46.25 .56 (.19)?Technology??Company Description:?Avnet, Inc. is a distributor of electronic components and?computer products to industrial customers worldwide. AVT?also distributes a variety of computer products to both the?end user and reseller channels. For the three months ended?10/2/98, sales rose 13% to $1.58 billion. Net income fell?63% to $15.7 million.??Play Description:?Downward trending gross profit margin is due primarily to the?competitive environment in the electronics distribution?marketplace as a result of the global industry correction?cycle as well as the increased sales of computer products,?including microprocessors, which have lower gross margins?than other products in the Avnets product line. Avnet needs?to overcome new organizational structure to better focus on?its core businesses to better serve the needs of customers?and suppliers. Recent news of a "significant" slump in?December sales of core products in its electronics and?computer marketing groups will result in fiscal Q2 EPS of?about $0.75, missing the First Call mean estimate of $0.91.?Stock failed on recent rally at key price point of $60 with?downside gap large enough to drive a truck through. Stock now?under short and long-term moving averages. Lots of overhead.?Likely to retest 52 week lows at $35.??Play: Failed Rally???Update:?Stock experiencing continued weakness off of recent earnings?warning. Stock now under short and long-term moving averages.?Lots of overhead. Could to retest 52 week lows at $35. Stock?moved up only fractionally during broad market rally Friday.?Tighten protective stop loss - $48.??BUY PUT FEB-45 AVT-NI OI=276 @ $2.25 SL=1.00?BUY PUT FEB-40 AVT-NH OI= 58 @ $ .88 SL= .25??Chart = http://quote.yahoo.com/q?s=AVT&d=3m?*****??BAC - Bank of America  - $64.56  (5.38)?Banking??Company Description:?Bank of America (BAC) is a multi-bank holding company that?provides banking and related services throughout the Mid?Atlantic, Midwest and South. For the nine months ended?9/30/98, total interest income rose 4% to $28.95 billion.?Net interest income after loan loss provision fell 10% to?$11.28 billion. Net income applicable to Common fell 20% to?$4 billion. Results reflect increased earning assets, offset?by a lower net interest yield and $1.19 billion in merger and?restructuring costs.??Play Description:?U.S. bank and broker shares are experiencing weakness on?renewed signs of economic and political trouble in Brazil,?where U.S. financial institutions have sizeable operations,?and profit-taking. Brazilian markets were roiled after a?large state within the country last week decided to halt?payments on its debt to the central government. Some of this?concern carried over to U.S. markets, knocking financial?stocks off highs hit earlier in 1999. The Bovespa has been?weak, and concerns about Brazil will cool the financial?sector.??Stock likely to test trading range of $55-60, still continues?to underperform sector, has declining relative strength, and?failed at the 200 moving day average.??Play: Failed Rally??Update:?The financial sector under pressure because of Brazil.?Moved up on Fridays (1/15) strong relief rally but?recommend staying with position while BAC stays below $65.???BUY PUT FEB-70 BAC-NN OI= 797 @ $7.25 SL=5.00?BUY PUT FEB-65 BAC-NM OI=5857 @ $4.50 SL=3.00??Chart = http://quote.yahoo.com/q?s=bac&d=3m?*****??DD - DuPont de Nemours  - $57.00 (2.50)?Chemicals??Company Description:?E.I. DuPont de Nemours and Company operates in five principal?industry segments: Chemicals, Fibers, Polymers, Life?Sciences, and Diversified Businesses. For the 9 months ended?9/30/98, total revenues rose 1% to $19.29B. Net income from?continuing operations before extraordinary item and?applicable to Common fell 37% to $859M. Revenues benefited?from acquisitions. Earnings were offset by a $651M?increase in purchased in-process R&D charges.??Play Description:?Pricing pressures from overcapacity continue to weigh on the?chemical group. Street has been busy cutting the group's?earnings estimates for the next couple of quarters, as?troubled economies in Asia and Latin America suggest that?demand/pricing conditions won't improve any time soon.?Commodity chemicals such as ethylene hardest hit, with prices?falling by as much as 50% over past year. Stocks have seen?some buying interest in recent weeks on hopes that lower?interest rates will jumpstart sagging global economy. But?gains appear more a function of underlying market strength and?light bargain hunting than any sea change in expectations for?a sustained earnings recovery. Chemical companies are?cutting jobs and reducing production to adjust to challenging?conditions. Comparison periods will also become more?attractive by mid-CY99. However, until that time there is no?reason to suspect the group to do anything but underperform?the market. Given existing oversupply, declining earnings?growth, slowing worldwide economic growth and the market's?preference for momentum over turnaround situations, DD could?be under pressure over the near-term. After advancing $7?over the past couple of weeks, DuPont signaled a failed rally?at its declining 200-day moving average. Target - $53.??Play: Failed Rally??Update:?Stock moved higher during Fridays (1/15) broad relief rally.?Stock still below declining moving averages. Tighten?protective sell stop to $60.25.??BUY PUT FEB-60 DD-NL OI=338 @ $5.00 SL=3.75?BUY PUT FEB-55 DD-NK OI=902 @ $1.75 SL= .75??Chart = http://quote.yahoo.com/q?s=dd&d=3m?*****??BMCS - BMC Software  - $40.06 (.19)?Software??Company Description:?BMC Software provides systems management software solutions?for host mainframe and distributed information systems, and?also offers maintenance, enhancement & support services. For?the six months ended 9/98, revenues rose 44% to $461.5M. Net?income totaled $133.4M, up from $34.4M. Revenues reflect?increased capacity-based upgrade fees and increased license?fees. Earnings reflect greater interest earned on cash?balances and decreased acquired R&D charges.??Play Description:?A leader in enterprise-level software was downgraded by?Soundview in October 98 and by Morgan Stanley last month.?The distributed systems and application management markets in?which the Company operates are far more crowded and?competitive than its traditional mainframe systems management?markets. The Company has experienced long development cycles?and product delays in the past, particularly with some of its?distributed systems products, and expects to have delays in?the future. Delays in new mainframe or distributed systems?product introductions or less-than-anticipated market?acceptance of these new products are possible and would have?an adverse effect on the Company's revenues and earnings.??Stock showing classic signs of a failed rally trading below?its declining 50, 100 and 200-day moving average and is?dangerously testing it prior support of $40. If BMCS break?below $40, could garner additional profits. Separately, BMC?Software announce today (1/5) that Platinum will abandon all?claims against MBC Software in Platinums lawsuit against?BMCS.??Play: Failed Rally??Update:?Although Prudential raised its rating on the stock to a strong?buy from a accumulate Friday (1/15), Pinnacle remains bearish?on the stock while it trades below its declining moving?averages. $41 is key benchmark. It the stock continues to?trade below $41, look for more downside action. Tighten?protective stop to $42.25.??BUY PUT FEB-45 BCQ-NI OI=1736 at $7.38 SL= 5.00?BUY PUT FEB-40 BCQ-NH OI=1599 at $4.00 SL= 2.25??Chart = http://quote.yahoo.com/q?s=BMCS&d=3m?*****??WLA - Warner Lambert  - $69.81 (3.75) Pharmaceutical??Company Description:?Warner Lambert is a manufacturer of ethical pharmaceuticals,?biologicals, capsules, consumer health care products and?confectionary products.??Play Description:?Shares of large U.S. drug companies are being hurt by profit?taking and concerns about proposed changes to the Medicare?payment system. Recently, a Bipartisan Commission opened the?door for Medicare to cover prescription drugs for?beneficiaries, a recommendation that if adopted, could put?pressure on drug companies. Recent inquiries regarding the?safety of Rezulin received nationally televised attention and?may give rise to investor concern. Also, it may be?difficult to sustain the growth rates for Lipitor, Rezulin?and Neurontin products that WLA has enjoyed this past year.??Top side consolidation since July may be difficult to overcome?in extended market conditions. Given that the drug sector?has and will continue to be a strong performing sector, we?recommend a modest sell-off price targets of $55 to 60.??Play: Failed Rally??Update:?Top side consolidation since July may be difficult to overcome?in extended market conditions. Actually lost more than $1 on?a day that the broad market gain 200 point. Tighten?protective sell stop to $71.25.??BUY PUT FEB-75 WLA-NO OI=1064 @ $7.13 SL=5.75?BUY PUT FEB-70 WLA-NN OI=2057 @ $4.00 SL=2.50??Chart = http://quote.yahoo.com/q?s=WLA&d=3m?*****??LLY - Eli Lilly   - $81.25  (-2.37)?Healthcare??Company Description:?Eli Lilly and its subsidiaries, discovers,?develops, manufactures and sells products and provides?services in one industry segment: Life Sciences. LLY also?provides healthcare management services. For the 9 months?ended 9/30/98, net sales rose 18% to $7.18B. Net income?totaled $1.54B vs. a loss of $844.6M. Results reflect?increased sales of Prozac, Gemzar and Evista, and the?absence of a $2.44B asset impairment charge.??Play Description:?A leading healthcare management services provider recent?topped out at its 52-week high of $91.31 and showing classic?signs of a failed rally trading above its 50, 100 and 200-day?moving averages. Retracement target $75-80 after climbing?30% over the past three months.??Play: Failed Rally??Update:?A leading healthcare management services provider recent?topped out at its 52-week high of $91.31 and showing classic?signs of a failed rally trading above its 50, 100 and 200-day?moving averages. Rallied over $6 on Wednesday but still?below failed rally point of $85.despite being upgraded by?ING. Tighten protective sell stop to $85.25.???BUY PUT FEB-85 LLY-NQ OI= 924 at $5.88 SL= 4.25?BUY PUT FEB-80 LLY-NP OI=1555 at $3.13 SL= 2.25??Chart = http://quote.yahoo.com/q?s=LLY&d=3m?*****??BDX - Becton Dickinson & Co  - $39.75  (1.81)?Medical Equipment??Company Description:?Becton, Dickinson and Company manufactures and sells a broad?line of medical supplies and devices and diagnostic systems?used by health care professionals, medical research?institutions and the general public. For the FY ended 9/30/98,?revenues rose 11% to $3.12B. Net income applicable to Common?fell 21% to $233.3M. Revenues benefited from acquisitions.?Earnings were offset by a $90.9M charge for restructuring?and the write-down of impaired assets.??Play Description:?Topside consolidation makes for conservative play. Stock is?unlikely to go much higher than the trading range of about?$43 in the next 3-6 months Earnings are projected to be?$1.57 share for fiscal 99 with a PE of 24.5, fairly pricey.?If Stock violates support at $38.00 could retest low set back?in September at $34. Stock moved up only fractionally during?broad market rally Friday. Tighten protective stop loss - $42.??Play: Failed Rally??Update:?Stock moved up only fractionally during broad market rally?Friday. Tighten protective stop loss - $42.??BUY PUT FEB-40 BDX-NH OI=114 at $2.50 SL=1.25?BUY PUT FEB-35 BDX-NG OI=134 at $ .69 SL= .25??Chart = http://quote.yahoo.com/q?s=BDX&d=3m?*****??Campbell Soup Company (CPB) - $45.13 -.81 (-7.12)?Consumer??Company Description:?Campbell Soup Company is a global manufacturer and marketer of?branded convenience food products operating in three business?segments: Soup and Sauces, Biscuits and Confectionery, and?Foodservice. Campbell Soup Company is the world's largest?maker and marketer of soup with fiscal 1998 sales of $6.7?billion.??Play Description:?Warm weather, flat sales, inefficient supply chain, and?companys ability to achieve costs savings and capacity?utilization are being called into question by analysts.?Increased marketing and selling expenses, increased store?level inventory levels, encroachment from private label (store?brand) products, reduced consumption levels and a recent?announce of new cost-cutting initiatives will cause fiscal?1999 earnings to fall short of analysts' estimates by 18 to?23 cents per share. Analysts surveyed by First Call Corp.,?which tracks such estimates, had expected the company to earn?$2.13 a share during the year, which ends July 31. Campbell?earned $1.90 a share in the prior year. Campbell Soup Co.?said it now expects U.S. soup consumption to rise by only 1?to 2 percent in the second quarter from the previous year,?not 4 to 5 percent.??Stock recently failed at $59 and then broke key support at?$54.00 on news of earnings shortfall. Excessive call buying?recently is bearish and may provide continued overhead?resistance.??Play: Earnings Warnings??Update:?Stock gave up nearly $1 during the strong broad relief rally?Friday (1/15). Stock still under pressure with considerable?overhead at $49.??BUY PUT FEB-50 CPB-NJ OI=135 @ $5.63 SL=3.25?BUY PUT FEB-45 CPB-NI OI=309 @ $2.13 SL=1.00??Chart = http://quote.yahoo.com/q?s=cpb&d=3m?*****??ERTS - Electronic Arts Inc.  - $47.00  (.25)?Software??Company Description:?Electronic Arts is an interactive entertainment software?company. The company develops, publishes and distributes?software worldwide for personal computers and advanced?entertainment systems. Electronic Arts posted revenues of?US$909 million for fiscal 1998. The interactive software?business has historically been a volatile and highly dynamic?industry affected by changing technology, limited hardware?platform life cycles, hit products, competition, component?supplies, seasonality, consumer spending and other economic?trends. The business is also intensely competitive.??Play Description:?Product development is becoming more complex, time-consuming,?costly to develop and increasing "hits" driven than earlier?generation products. Company produces games for proprietary?video game platforms such as the PlayStation and the N64  in?direct competition with Sony and Nintendo. Gross margins are?likely to decline because of increased N64 products, which?carry significantly lower margins due to high cost of goods.?Increased financial difficulties by distributors could have?an adverse effect on the operating results. Whisper number?of $1.18 per share for earnings due to be released on?1/21/99. Pinnacle believes that holiday enthusiasm, if any,?will be short-lived by the realities of an increasing complex?and competitive market for entertainment software.??The stock is likely to struggle under recent consolidation?levels and test recent lows just a few months back. Whisper?number of $1.18 per share for earnings due to be released on?1/21/99. Pinnacle believes that holiday enthusiasm, if any,?will be short-lived by the realities of an increasing complex?and competitive market for entertainment software.??Play: Failed Rally??Update:?The stock moved higher during Fridays strong relief rally.?Still sitting precariously at it 200-day moving average.?Tighten protective sell stop to $49.25. Whisper number of?$1.18 per share for earnings due to be released on 1/21/99.?Pinnacle believes that holiday enthusiasm, if any, will be?short-lived by the realities of an increasing complex and?competitive market for entertainment software. If ERTS?trades below $44, could retest prior low of $34-39.???BUY PUT FEB-50 EZQ-NI OI= 0 @ $5.63 SL=4.75?BUY PUT FEB-45 EZQ-NI OI=30 @ $2.50 SL=1.00??Chart = http://quote.yahoo.com/q?s=erts&d=3m?*****??HSY - Hershey Foods  - $61.25 (1.75)?Consumer??Company Description:?Hershey Foods (HSY) manufactures, distributes, and sells a?broad line of chocolate and non-chocolate confectionery,?pasta and grocery products. For the nine months ended?10/4/98, net sales rose 4% to $3.2 billion. Net income rose?5% to $230.9 million. Revenues reflect higher sales of core?confectionery brands and incremental sales from the?introduction of new confectionery products. Earnings also?reflect reduced marketing costs for existing brands and lower?selling costs in foreign markets.??Play Description:?Stock continues to struggle following analyst downgrades and?Q4 weakness. Margins are likely to be under pressure with?increased costs. Stock simply seems to be out of favor and?relative strength is declining. Likely to test lows at $48.??Play: Sector Weakness??Update:?Stock moved higher during Fridays (1/15) strong broad market?relief rally. Stock still trading below break down price of?$62. Tighten protective stop to $62.25.??BUY PUT FEB-65 HSY-NM OI=192 @ $4.38 SL=2.75?BUY PUT FEB-60 HSY-NL OI=371 @ $1.63 SL= .75??Chart = http://quote.yahoo.com/q?s=hsy&d=3m?*****??MRK - Merck  - $147.13 (-6.68)?Pharmaceutical??Company Description:?Merck is a pharmaceutical company that discovers, develops,?produces and markets human/animal health products and?services. Merck also provides pharmaceutical benefit?services. For the 9 months ended 9/30/98, sales rose 11%?to $19.37B. Net income rose 14% to $3.85B. Revenues?reflect higher sales of established major products & newer?products, and growth from the Merck Medco Managed Care?business. Earnings also reflect gains on the sales of?businesses.??Play Description:?After climbing 38% over the past four months, this leading?pharmaceutical company is showing signs of potential?failed rally below its 52-week high of $161.75. Retracement?target $136-$140. Pinnacles sentiment indicator is reaching?extreme levels (4.7) setting this high tech company up for a?precipitous sell-off if expectations dont measure up within?the drug sector.??Play: Failed Rally??Update:?Keep an eye on MRKs key benchmark at $145. If MRK trades?below this key benchmark, it could re-test support at $136?at its 200-day moving average. Drugs starting to see sector?rotation.??BUY PUT FEB-145 MRK-NI OI=1378 at $4.50 SL= 3.25?BUY PUT FEB-140 MRK-NH OI=1177 at $2.88 SL= 1.75??Chart = http://quote.yahoo.com/q?s=mrk&d=3m?*****??PKN - Perkin-Elmer Corporation  - $95.38  (-.55) Healthcare??Company Description:?Perkin-Elmer Corporation (PKN) develops, manufactures and?markets life science systems and analytical instruments for?the pharmaceutical, biotech, environmental, agricultural,?forensics and chemical industries. For the three months ended?9/98, revenues rose 16% to $375.8 billion. Net income fell?21% to $17 million. Revenues reflect higher sales of biotech?products in the U.S. and Europe. Earnings suffered from?higher R&D, merger charges, decreased interest income, a $3.1?million loss at Tecan and a higher tax rate.??Play Description:?PKN operates internationally, with manufacturing and?distribution facilities in various countries throughout the?world and derives approximately 53% of its revenues from?countries outside of the United States. Results continue to?be affected by market risk, including fluctuations in foreign?currency exchange rates and changes in economic conditions in?foreign markets. Company is in the process of reorganizing?the Company's capital structure to help move Perkin-Elmer?toward a market leader in biomedical and genomics?information. They are currently evaluating strategic?alternatives for our analytical instruments business.??Distribution among top institutional shareholders is taking?place as stock is likely to trade back into trading range of?$65-75. Stock moving up in anticipation of Celera Genomics?spinoff but sale of the AI division may be dragging on.?Questions also remain about suitable valuation level after?spinoff. Todays price action attributable to possible delays?in Celera Genomics spinoff.??Play: Failed rally??Update:?Consolidating tightly in upper range ($90-98). We still?anticipate a sell-off and retracement to $86.??BUY PUT FEB-100 PKN-NT OI=19 @ $7.50 SL=6.00?BUY PUT FEB-95 PKN-NS OI=164 @ $4.75 SL=3.00??Chart = http://quote.yahoo.com/q?s=pkn&d=3m?*****??XCIT - Excite, Inc. - $67.50 (7.50)?Internet??Company Description:?Excite, Inc. (XCIT) is a global media Company offering?consumers and advertisers comprehensive Internet navigation?services with extensive personalization capabilities. The?Company's services include the Excite and WebCrawler brands.?For the nine months ended 9/30/98, revenues totalled $100?million, up from $33.6 million. Net loss rose 40% to $39.7?million. Results reflect a greater number of advertisers?purchasing banners, offset by a $10.1 million amortization?charge and higher technology costs.??Play Description:?Stock likely to move in sympathy with Internet selloff on?earnings news. Excite is a 2nd tier stock that has?consolidated and for which heavy call activity may provide?overhead resistance in near term. Gravity-defying Internet?stock valuations may be nearing culmination a correction in?the sector will create winners and losers, intensifying?competitive pressure and drive companies to consolidate.??Limited operating history; no assurance of profitability,?potential fluctuations in quarterly results; unpredictability?of future revenues, risks associated with banner advertising,?intense competition in the sale of advertising on the web, risks?related to sponsorships, and risks related to netcenter agreement?are just a few of the many risk factors that investors will soon?reckon with.??Play: Overbought / Overextended?EXTREMELY RISKY! Trade accordingly??Update:?Moved up fractionally during Fridays (1/15) strong relief?rally. Still over extended at $67. Tighten protective sell?stop to $70.25.??BUY PUT FEB-75 KQB-NO OI=112 @ $15.25 SL=11.75?BUY PUT FEB-70 KQB-NN OI=162 @ $12.13 SL= 9.75?BUY PUT FEB-65 KQB-NM OI=246 @ $ 8.63 SL= 6.75??Chart = http://quote.yahoo.com/q?s=xcit&d=3m???DISCLAIMER?**********?This newsletter is a publication dedicated to the education?of options traders. The newsletter is an information service?only. The information provided herein is not to be construed?as an offer to buy or sell securities of any kind. The?newsletter picks are not to be considered a recommendation?of any stock or option but an information resource to aid the?investor in making an informed decision regarding trading in?options. It is possible at this or some subsequent date, the?editor and staff of The Option Investor Newsletter may own,?buy or sell securities presented. All investors should consult?a qualified professional before trading in any security. The?information provided has been obtained from sources deemed?reliable but is not guaranteed as to accuracy or completeness.?The newsletter staff makes every effort to provide timely?information to its subscribers but cannot guarantee specific?delivery times due to factors beyond our control.???---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on ?01/18/99 08:27 AM ---------------------------?   ?	Enron Capital & Trade Resources Corp.?	?	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)     ?                       01/17/99 08:20 PM?	??Please respond to xtrials@optioninvestor.com?To: Option Investor Newsletter Trials <xtrials@optioninvestor.com>?cc:  (bcc: Mark - ECT Legal Taylor/HOU/ECT)?Subject: Sunday - Option Investor Newsletter 1 of 7 (resend)????Several readers reported not receiving this section so?we are resending it.  If you already received this section?please ignore this duplicate.??Thanks???The Option Investor Newsletter   Sunday  1-17-98  1 of 7?Copyright 1998, All rights reserved.?Redistribution in any form strictly prohibited.??Posted online for subscribers at http://WWW.OPTIONINVESTOR.COM??Published three times weekly, Sunday, Tuesday, Thursday evenings.?New plays and market wrap updated daily on the website.???Entire newsletter best viewed in COURIER 10 font for alignment?******************************************************************?MARKET STATS FOR LAST WEEK AND PRIOR WEEKS?******************************************************************?       WE 1-15           WE 1-08         WE 12-31         WE 12-25?DOW     9340.55 -302.77  9643.32 +461.89  9183.43 - 36.56  +342.17?Nasdaq  2348.20 +  3.79  2344.41 +152.22  2192.60 + 29.52  +119.15?S&P-100  616.46 - 19.56   636.02 + 32.08   604.03 -  3.91  + 25.30?S&P-500 1243.26 - 31.43  1275.09 + 45.93  1229.23 +  4.15  + 46.31?RUT      427.05 -  4.18   431.23 +  9.27   421.96 + 16.42  + 11.78?TRAN    3148.53 -211.75  3360.28 +210.97  3149.31 +108.48  + 73.44?VIX       29.75            23.88            25.41            22.04?Put/Call    .56              .48              .55              .52?******************************************************************??Never, ever trust a central bank in a foreign country with it's?currency under attack.??Remember the vow from the central bank in Brazil on Thursday??"We will utilize every reserve at our disposal to prevent the?disastrous floating of the Real". I guess their reserves were?as limited as my wife's checking account since less twelve hours?later they announced they would float the Real on a temporary?basis in order to protect their reserves. Sounds like a?contradiction to me. So why did the markets rebound instead of?crash as analysts had predicted???Ask ten analysts and you will get ten different answers but the?two most common are "it took a level of uncertainty out of the?market" and "relief that the free market forces would now determine?the level of the Real and not artificial stability enforced by the?government". The first one makes no sense at all. On Thursday the?Dow crashed -228 points on worries that Brazil MIGHT float. So?on Friday they floated and because there was no uncertainty left?the market exploded? Lost me there. The second reason make much?more sense. Brazil has been fighting the flight of funds from the?country by raising interest rates to a crushing 40% or more. How?would you like to have that kind of credit card interest? How?can a country survive paying 40% on it's debt? It can't, not for?long. The relief shown in Brazil markets was immediate and huge.?The Bovespa surged +1,690 points or +33.41%. That would be the?equivalent of +3,123 point Dow day. (please, please, just let?me be fully invested the night before!!) I bet they are still?celebrating in Brazil today. Yes their money is worth less but?now they can at least kep more of it. The remaining problem is?with Chile, Argentina, and the other closely linked South American?countries. They will be watching the Real and if it sinks fast?then they will be forced to devalue as well. The dominos are?already lining up. All eyes will be on the support given to?Brazil by the U.S. and the IMF in the coming weeks to see if?the Real can stand on it's own or become a blackhole, sucking?everyone in South America down with it.??Now back to our reality. The market, for whatever reason,?exploded Friday, the day before a long weekend, when it should?have been cautious. Remember the oversold conditions we talked?about on Thursday. The rubber band analogy I used last week on?the +500 point gain also works on a -500 point loss. When?markets get stretched so tight either way there has to be a?relief day where things snap back to normal. We experienced?that Friday. I have been preaching the return of the January?bull market rally after the profit taking for over a week.?Surprise, it is back! Those of you who bought the dip on?Thursday are looking pretty smart today.??The Nasdaq actually finished up for the week! Tech stocks?rebounded strong and were really not supported by the Internet?stocks. Some Internets were up Friday but the majors were?still taking profits. Speaking of major Internet stocks, we?are starting YHOO again today for the split run. Yahoo dropped?-98 points in the last four days but closed +$13 off it's?Friday lows. The 2:1 split is Friday Feb 5th, only three?weeks away. We know the Internets have had several downgrades?in the last week but they were only downgraded on price, not?performance. Those of you who have the ability to trade YHOO?should look for an entry point this week. Don't blindly jump?in on Tuesday. Confirm lack of downward movement first.??We had a conference at the office here last week with many?of the newsletter contributors coming in from all over the U.S.?We were planning the first Option Investor Seminar in February.?(details below) What really came out of the planning process?was the need to educate traders on "trend trading" (not trend?holding) and setting profit goals. While all this will be?discussed in detail at the seminar there is a real need based?on the email we get to touch on some of the concepts here.??Let me try an analogy for trend trading. The market is like?the waves on the ocean. If you are standing on one of the?major surfing beaches you will see wave after wave come?crashing through. Between each major wave is a period of?calm which may have several smaller waves. If you have ever?stood in the surf you are familiar with the sensation called?undertow. This is when the water rushes back out to sea in?preparation for the next wave. Now picture yourself with a?desire to surf. You have seen people do it. You go to a?surfboard shop and buy a board. You ask the salesman if?surfing is hard. No problem, he says. Lay on the board,?swim out in the surf, catch a wave, stand up on the board?and surf back in. Easy! Now I ask you, can you surf? If you?are like most beginner surfers you get out to the waves but?now you feel more like a piece of driftwood bobbing in an?endless sea than a human mastering the art of surfing. You?are battered, soaked, tired and more likely then not pretty?frustrated with being abused by every wave you tried to?catch. Options trading is like surfing. Trading, the salesman?says, is easy. You just open an account, (board), jump in?the market (ocean), catch a wave (stock), buy some calls?(surf), and end up safely on the beach (profit). NOT!?Most beginning traders think it is this easy. Most end up?on the rocks (broke).??What we want to teach you is to be a successful trader, not?a buy and holder. When you are learning to surf you probably?practice on hundreds of smaller waves. Each one moving you?only a few yards before you fall and have to start over.?Learning how to trade is the same way. You should try to?catch many small moves and practice improving your skills?before attempting the long run to the beach. I am constantly?besieged by email on new people expecting to buy a $3 option?and sell it for $15. That would be the equivalent of swimming?half a mile off shore, catching a fifty foot wave and surfing?all the way to the beach on your first try. It just does not?happen. What we have tried to teach people in the past it to?take a small profit many times instead of a large profit once.??For those that are mathematically challenged let me illustrate.?If you start with a $10,000 account and generate a 10% profit?every week for a year, WITHOUT COMPOUNDING, after twelve months?you would have over $60,000. If you COMPOUND the 10% then you?would have over $1,000,000. At just 10% a week! Now before you?start firing off those emails I know you can't compound 10%?every week. First you may hit some losers now and then but?you are also going to hit some bigger winners more often. Just?to illustrate. If you bought an option for $5.00 and sold it?for $5.50 that is a 10% profit. Now how many times have you?bought an option and watched it go up $1-$2 and then slip?back down again the next day? More often than not! Now, if?you had put in a sell for $6.00 that is a 20% profit and?probably would fill the same day. If you did that twice a?week, how much would that be a week. CLUE 40% Now if you?could get only 10% or $.50 per week compounded over a year?it would be over $1,000,000. Is $.50 hard to do over and?over and over? Of course not. Is 40% possible? absolutely.?The real number is somewhere in between.??It is only hard to do if you HOLD and not TRADE. How far are?you going to get if you just hold on to your surf board with?both hands for dear life? You will be pushed to and fro?wherever the ocean (market) takes you. Sometimes you will?be pushed to the beach (profit) or onto the rocks (broke)?or drift out to sea never to be seen again. (clueless)??Now that I have completely lost my train of thought let's?get to the point. Every stock ebbs and flows. Remember the?3-5-7 trend cycle from last week? Up three days, down one,?up five days, down three, up seven days, down five. Every?stock will normally trade in one of these cycles. The trick?is to buy the stock on the down side and sell it on the up?side. Again, you do not have to be in the market every day.?It is better to only be in the market WHEN THERE IS PROFIT?TO BE MADE. Everything else is noise. Sometimes expensive?noise. Learn to play the trends. Watch a stock for several?days. Study the charts. Watch the intraday charts. Learn?how it moves. I traded TXN early last year for a month.?It would always jump up at the open, wander during the day?and drop at the close. For weeks I would sell at the open?for a $.50 to $1.00 profit and then buy the same option?back at the close for almost what I had paid for it the?day before. Day in and day out. Cash flow. 10% a day.?(don't even bother to compound that) In this current bull?market there are many, many stocks that you can make 10%?or more a day just trading the trends. The larger your?account becomes the easier it gets. You can start taking?5% a day. For instance, look at a CSCO chart or an ASND.?Can you see any way possible to not have made a $1.00 a?day, two or three days a week, just trading those stocks???The positive trend is the key. Find a stock with a trend,?pick and option, WAIT for an entry point, set a limit sell.?Repeat, repeat, repeat, repeat......??I want 10 volunteers. Pick a stock or two, practice the?above plan and send me your results. I will publish the?results and give each of you a years free subscription.?Obviously I will have 15,000 emails tomorrow volunteering?and I can't take you all. The first 10 with verifiable?results will qualify. It does not matter whether you trade?one contract or one hundred. The key is the pattern. No?fair using past results. All trades must be after today.?Trade confirmations must be available.??When I publish these results you will never look at a?mutual fund claiming a 25% annual return again. How can?they brag about beating the S&P!! I would be embarrassed.??I have not seen any earth shaking economic news so far?this weekend and the Fed does not meet again till February?so I would expect the rally we had Friday to continue next?week. I am excited and you should be also. Earnings are?starting to flow and we have many split candidates in the?next 2-3 weeks. This is the perfect time to be in the?market. If you don't profit from it you should be in?mutual funds.??Good Luck???Jim Brown?Editor???************?JIM'S PLAYS?************?What a nightmare week! Just goes to show that the best laid?plans of mice and men sometimes go astray. Everything was?looking so good moving into last week. We expected a little?profit taking and then off to the races again. Little did we?expect a monster dip caused by Brazil at the end of the profit?taking. The put-credit-spreads that were well on their way?to expiring worthless for a full profit, suddenly were in?jeporday of being a serious liability. My INKT 150 puts were?$30 out of the money on Monday and $10 in the money on?Wednesday! Ouch. Short cover madness. The 130-puts still?expired worthless but I bit the bullet on the $150. Then?on Thursday the 50-contract MCHP $35 put credit spread was?safely out of the money with MCHP at $41.50. The bid was?$.06 x.19. Thursday night MCHP announced earnings and missed?their estimates by $.01. BOOM! Down $8.00 Friday morning!?The bid is now $3.50 for an option I wrote for $.56.?Fortunately MCHP came back to close at $35.13. I covered the?50 contracts at $.38 30 min before the close and was happy?to get it. People emailed me last month and asked why I?had closed several put spreads several days early for .25?or less when I could have let them expire worthless. This?was why. Always take a profit when one is available and you?will never lose money. Holding an option long term is like?suicide. The trade will blow up on you when you least expect?it.??The $45 NEON put credit spread was closed at .25 for almost?a maximum profit.??I closed the ATI calls for a substantial loss after the bidders?started dropping out. Had I held until Friday I could have?broken even.??I will probably get criticized for the following but I have?suffered in the past from not selling in the face of seemingly?very bad news and did not want to have history repeat itself.?When the first Asian problem occurred in Oct 1997 I was heavily?invested and did not sell. I thought it was no big deal and?would bounce back in a day or two. I woke up at the open on?the biggest drop day to see the futures lock limit down at?-27 and Dow futures out of sight. It was a disaster and by?not selling at the open I lost almost three times as much.?So the point of the story was I did not want to be holding?if Brazil was going to explode the world economy again.??I took a bloodbath Wednesday morning and sold at the low for?the day. The good news was that I was in cash for the rebound.?Once I realized that the bull market was viewing this as a?buying opportunity I jumped right back in. Basically I broke?even for the day but there was a lot of anguish before the?market closed.??Summary: Plays from last Sunday??* = long side of the spreads?(10) ATI  JAN-75  CALLS @ $7.00 sold @ 2.19    $ -4,810?(10) INKT JAN-130 PUTS  @ $3.63 covrd@  .25      +3,380?(10) INKT JAN-150 PUTS  @ $4.88 covrd@ 7.63      -2,750?(20)*INKT JAN-125 PUTS  @ $ .69 sold @  .25      -  880?(10) NEON JAN-45  PUTS  @ $1.50 covrd@  .25      +l,250?(10)*NEON JAN-40  PUTS  @ $ .31 expir@  .00      -  310?(50) MCHP JAN-35  PUTS  @ $ .56 covrd@  .38      +  900?(50)*MCHP JAN-30  PUTS  @ $ .31 expir@  .00      -1,550?                                   Total         -4,770??Stock plays carried over:??All sold at the open on Wednesday?FLC  5000 @  8.31 sold  8.25    -   300?GLM  5000 @ 10.10 sold  9.63    - 2,350?SUNW 3000 @ 89.78 sold 89.88    +   300?FTL 10000 @ 17.88 sold 16.06    -18,200?NDB  5000 @ 22.56 sold 19.56    -15,000?PSIX 5000 @ 29.00 sold 23.63    -26,850?                       total    -62,400 OUCH!??Jumped back in on the rebound Wednesday and sold Wednesday:??Bought 10000 KMAG @ 14.13 sold @ 15.44   +13,100?Bought  7000 SUNW @ 91.88 sold @100.00   +56,840?                               total     +69,400???Options bought on the dip Thursday sold Friday:??(100) DELL-FEB-75  CALLS DLQ-BO @ 8.13 sold @ 8.19  +   600?(75)  SUNW-FEB-90  CALLS SUQ-BR @12.25 sold @13.63  +10,350?(75)  MSFT-FEB-140 CALLS MSQ-BH @11.63 sold @12.63  + 7,500?(25)  LU-FEB-100   CALLS LU-BT  @11.75 sold @14.38  + 6,575?(40)  TLAB-FEB-75  CALLS TEQ-BO @ 9.88 sold @11.19  + 5,240?(10)  OEX-FEB-630  CALLS OEY-BF @12.75 sold @11.75  - 1,000?                                            total   +29,265*??* in hindsight I sold these way early as the end of?day rally would have pushed this total over $60,000.??Total for the week +$31,495 but it was not pretty. I did?sleep better Friday night knowing the week was over.??In retrospect I could have done a lot of things different?and good traders always try not to repeat their mistakes.?Had I not sold at the disaster open it probably would not?have been much different. I would not have lost the $62k?but I would not have been in a position to do the SUNW and?KMAG trade for the +$69k. I personally look at any week?that closes with a profit as a success.???Current stock holdings:??KMAG 5000 @ 13.56 current 14.88 Seagate sympathy play?SRCM 5000 @ 22.75 current 19.75 AOL rumor surfaced again?PAIR 4000 @ 10.50 current 10.56 Intel takeover rumor??Current options:??(10) OEX-FEB-630 CALLS OEY-BF @ 13.00??????OptionInvestor.com Trend Trading Options Seminar?************************************************************??OIN announces it's first ever Option Investing Seminar.?The seminar will be February 23 & 24th in Denver Colorado.??This inaugural event will be a one of a kind special. Readers?have asked for intensive options trading instruction from?the principals at Option Investor. We have put together a?two day event where no one will leave unhappy. A roster of?speakers will give you first hand instruction on how to spot?trends and trade trends. Every facet of options trading will?be covered. If you want to make a living trading options you?will not want to miss this. Unfortunately seating will be?strictly limited for this inaugural event. It is strictly a?first come first served basis. Only 125 persons will be?able to attend. Everyone who attends will meet the entire?OIN staff and can ask any and all questions as we go through?the material.??Instructors will include:??Jim Brown, head options guy?Ross Jardine, Vice President of Online Investor Advantage?Richard Kerne, Marketing director OIN?James (kimo) Brown, Vice President Research OIN?Ray Cummins, combo plays editor?Mark Wnetrzaks, covered calls, naked puts editor?Chris Verhaegh, spreads specialist, OIA instructor?Andrew Aronson, Rosenthal Collins?Alan Knuckman, Rosenthal Collins?Austin Tanner, Pinnacle Capital??Other OIN research staff present will include:??Missy Masley Speck, research analyst?Buzz Lynn, research analyst?Jody Osborne, research analyst?Chris Bouck, research analyst?Ted Fritsch, research analyst?Kathryn Robine, research analyst??Meet the other OIN staff as well and put a face with a name:??Kristin Welsh?Dana Ewing?Chris Carlino?Julie Montoya?Sebrina Bowman?Kassity Mihelich?D. J. Smith?Dan Anderson???Schedule:??Tuesday 2/23??6:00-10:00PM Open house - Drop by and meet everyone. Free for?all question and answer session. One on one Q&A with multiple?instructional areas featuring OIN staff. Pick the chat group?you want and really dig in or wander from group to group.?Refreshments and drinks.??Wednesday 2/24??8:00 -8:30  Continental breakfast?8:30 -12:30 Combat Options, Trends, Stealth Trading?12:30-1:00  Working lunch?1:00 -4:30  Strategies, Techniques, Putting it all together?4:30 -5:00  Break?5:00 -??    Person to person Q&A with the entire OIN staff.?        Personal instruction in the area of your choice?        by all the OIN instructors. Choose the group/strategy?        you want and get focused on the right information with?        personal interaction. There is no deadline and we will?        stay until ALL your questions have been answered.???The price $1,295??Where else can you get a full day of personal instruction from?experts in their respective fields in a one on one environment???Reserve now: Tuesday will be too late. Include your name, email?and phone number and someone will call you to confirm.??*****  mailto:seminar@optioninvestor.com??????Market Sentiment - By Pinnacle Capital Advisors?************************************************************??Excessive Optimism could Spoil the Party??As we enter a key earnings week, keep an eye on what the option?speculators.  If you see excessive call volume, it may signal?that we may be at a near-term top.  If you see increased put?volume, the key reversal we saw on Friday (1/15) could support a?continuation of the bull run.??We are entering a new expiration period and therefore some of the?indexes and put/call ratios will become volatile over the next?couple of days as options traders establish new positions.??Pinnacle is still concerned by the excessive Bullish sentiment as?tracked by Investors Intelligence latest poll - 60% Bullish, %30?Bearish.  This is the highest level for bullish sentiment that?we have seen for a while.??Pinnacle's short-term indicators are still flashing bearish?overtones over the near-term so we advise subscribers to?tightly protect their long positions.  Any questions?regarding market sentiment can be directed at:?pinnacle@optioninvestor.com????Market Sentiment at a Glance     Friday    Tues     Thurs?Indicator                       (1/15)    (1/19)   (1/21)   Alert?********************************************************************??Pinnacle Index (OEX):?-----------------------------------------------------------------?Overhead Resistance (620-635)     1.7?Underlying Support  (595-610)     1.0????Put/Call Ratios:?-----------------------------------------------------------------?CBOE Total P/C Ratio               .5?CBOE Equity P/C Ratio              .4                        *?OEX P/C Ratio                     1.2???Peak Open Interest (OEX):?-----------------------------------------------------------------??Puts                              610?Calls                             610?P/C Ratio                         1.0???Market Volatility Index (VIX):?-----------------------------------------------------------------?CBOE VIX                         29.75                      *???Investors Intelligence:?-----------------------------------------------------------------?Bullish                          60.0%                      *?Bearish                          30.0%?????The Power of Expectation Analysis??It has often been said that the crowd is right during the?market trends but wrong at both ends.  Measuring and?evaluating the sentiment of the crowd, therefore, can give?savvy option traders a decided edge.???Pinnacle Index?-----------------------------------------------------------------?OEX                             Friday     Tues     Thurs?Benchmark                       (1/15)     (1/19)   (1/21)?-----------------------------------------------------------------???                    (630-635)      2.6?                    (620-625)      1.1?Overhead Resistance (620-635)      1.7??OEX Close                        616.5??Underlying Support  (595-610)      1.0?                    (605-610)       .9?                    (595-600)      1.0??Average ratings:?Resistance levels 2.0 / Support .5??What the Pinnacle Index is telling us:?Overhead sentiment resistance is Moderate weak at the OEX 620/635?level while the underlying support is moderately weak.???Put/Call Ratio?-----------------------------------------------------------------?                                Friday     Tues     Thurs?Strike/Contracts                (1/15)     (1/17)   (1/19)?-----------------------------------------------------------------?CBOE Total P/C Ratio              .52?CBOE Equity P/C Ratio             .38?OEX P/C Ratio                    1.23????Peak Open Interest (OEX)?-----------------------------------------------------------------?                     Friday          Tues          Thurs?Strike/Contracts     (1/15)          (1/17)        (1/21)?-----------------------------------------------------------------?Puts                 610 / 8,152?Calls                610 / 8,360?Put/Call Ratio       .97???????Volatility Index (VIX)?-----------------------------------------------------------------?                    Major?Date                Turning Point       VIX?-----------------------------------------------------------------?October 97          Bottom              54.60?July 20, 1998       Top                 16.88?October 8, 1998     Bottom              60.63?January 11, 1998    Top                 26.38??January 15, 1999                        29.75????????Investors Intelligence Survey?-----------------------------------------------------------------?                    Major             Percent     Percent?Date                Turning Point     Bullish     Bearish?-----------------------------------------------------------------?October 97          Bottom            22.0        48.3?July 20, 1998       Top               52.0        24.0?October 8, 1998     Bottom            38.5        42.7?January 11, 1999    Top ?             58.3        30.0??January 15, 1999                      60.0        30.0   *??????Market Posture?*********************************************************?As of Market Close - Friday, January 15, 1999??                   Major Support?Broad Market         /Resistance    Last    Posture/Since  Alert?****************************************************************??DOW Industrials    9,100   9,730   9,341    Neutral   1.15 *?SPX S&P 500        1,210   1,280   1,243    Neutral   1.12?OEX S&P 100          600     635     616    Neutral   1.12?RUT Russell 2000     420     435     427    Neutral   1.12??NDX NASD 100       1,900   2,010   1,982    Neutral   1.8?MSH High Tech        930     980     969    Neutral   1.8??                   Major Support?Technology           /Resistance    Last    Posture/Since  Alert?****************************************************************?XCI Hardware         830     875     868    Neutral   1.8?CWX Software         610     665     658    Neutral   1.8?SOX Semiconductor    360     410     403    Neutral   1.8?NWX Networking       420     450     441    Neutral   1.8?INX Internet         470     570     481    Neutral   1.8??                   Major Support?Financial            /Resistance    Last    Posture/Since  Alert?****************************************************************?BIX Banking          650     710     670    Neutral   1.15 *?XBD Brokerage        630     725     665    Neutral   1.14?IUX Insurance        590     620     602    Neutral   1.15 *??                   Major Support?Other                /Resistance    Last    Posture/Since  Alert?****************************************************************?RLX Retail           800     860     823    Neutral   1.8?DRG Drug             740     795     753    Neutral   1.8?HCX Healthcare       720     780     737    Neutral   1.8?XAL Airline          310     350     323    Neutral   1.12?OIX Oil & Gas        245     260     243    BEARISH   1.14????Posture Alert??After rebounding more than 200 points on Friday (1/15) just?above the 50-day moving average, we have turned Neutral again?across the Dow Jones 30.  We have also turned Neutral across?the Financial sectors after reversing course at key?benchmarks.  Please make a note of our new bearish benchmarks?for we have updated them accordingly after Friday's key?reversal signal (tweezer bottom).??A detailed description of our Market Posture and its?applications can be found at:??www.optioninvestor.com/marketposture?????HOW TO SUBSCRIBE?*****************************************************??We would like to have you as a subscriber. You may subscribe?at any time but your subscription will not start until your?free trial is over.??The monthly subscription price is $39.95?The quarterly price is $99.95 which is $20 off the monthly rate.??************************************************************??To subscribe you may go to our website at??www.optioninvestor.com??and click on "subscribe" to use our secure credit?card server or you may simply send an email to?"subscribe@optioninvestor.com" with your?credit card information,(number, exp date, name)?or you may call us at 303-797-0200 and give us the?information over the phone.??You may also fax the information to: 303-797-1333?????DISCLAIMER?**********?This newsletter is a publication dedicated to the education?of options traders. The newsletter is an information service?only. The information provided herein is not to be construed?as an offer to buy or sell securities of any kind. The?newsletter picks are not to be considered a recommendation?of any stock or option but an information resource to aid the?investor in making an informed decision regarding trading in?options. It is possible at this or some subsequent date, the?editor and staff of The Option Investor Newsletter may own,?buy or sell securities presented. All investors should consult?a qualified professional before trading in any security. The?information provided has been obtained from sources deemed?reliable but is not guaranteed as to accuracy or completeness.?The newsletter staff makes every effort to provide timely?information to its subscribers but cannot guarantee specific?delivery times due to factors beyond our control.??