---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on 
01/13/99 07:47 PM ---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  xtrials@optioninvestor.com (Option Investor Newsletter     Trials)     
                       01/13/99 07:28 PM
	

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



The Option Investor Newsletter         Wednesday  1-13-98
Copyright 1998, All rights reserved.
Redistribution in any form strictly prohibited.

Posted online for subscribers at http://WWW.OPTIONINVESTOR.COM

Also provided as a service to The Online Investor Advantage

Published three times weekly, Sunday, Tuesday, Thursday evenings.
******************************************************************
MARKET WRAP
******************************************************************
        01-13-98         High     Low     Volume   Advances Decline
DOW     9349.56 -125.12 9471.34  9213.10  934,809k  1,021   2,090
Nasdaq  2317.30 -  3.40 2353.87  2206.19 1195,400k  1,628   2,504
S&P-100  612.83 -  3.66  620.45   598.01   Totals   2,649   4,594
S&P-500 1234.40 -  5.11 1247.66  1206.59            36.6%   63.4%
$RUT     424.86 -  2.50  427.36   412.64
$TRAN   3169.42 - 37.23 3202.50  3085.21
VIX       31.26 +  4.88   35.48    29.55
Put/Call Ratio      .48
******************************************************************

The Nightmare on Wall Street, Starring China, Brazil, Argentina and
others.


I woke up with a terrible nightmare this morning. I dreamed that
the S&P Futures were limit down -27 and the Dow futures were down
-300. The bad news - it was not a nightmare, it was real life.

If you don't live in a closet you know by now that the Brazil
counterpart to Alan Greenspan resigned and Brazil devalued its
currency. The worst possible of all global scenarios. But wait!
Is that another dip to buy?

After opening down -266 on the Dow and -113 on the Nasdaq, the worst
was over before it started. The CNBC hype undoubtedly contributed
to the massive sell off because as soon as buyers could get into
the market we moved immediately off the panic lows.

I am not saying this is not a problem but as I said last night I
thought Brazil had already been discounted in the market. The
rapid bounce back has proven this to some extent. Several analysts
said several months ago that we could expect -500 to -600 if Brazil
devalued. Since it did not happen it shows the strength of the
current bull market.

I went on record last night that I did not think we were starting
a correction and the bull was just resting. Was I worried this
morning? You bet! But I was also greatly relieved when I saw the
buyers come back to work. Think about it. What else can happen
that could be worse than this? Nothing I can imagine. Sure the
Asian connection to Brazil will be tested tonight and we are still
faced with the domino theory in South America, but again, I think
the worst is already discounted. As soon as investors realize that
Latin America did not sink beneath the ocean and the IMF is not
going to let the eighth largest economy in the world sink, then
they will be putting that cash back to work.

The volume this morning was not bad. The volume on the recovery
this afternoon was great. The Nasdaq did almost 1.2 billion shares
again and the NYSE over 900 mil. The market is expecting earnings
by the dozens next week and appears ready to rumble.

Intel broke with the pack early and starred in the recovery adding
+3.44 for the day. Microsoft, SunMicro and almost anything tech
shook off the news and powered forward. SunMicro was up over $10
at one point on takeover rumors by IBM. IBM announced they were
raising over $4 bil in new cash today which was earmarked in part
for acquisitions. Microsoft and Dell were up strongly at midday
but caved in at the close.

Traders fear of darkness was apparent as the Dow backslid from
-35 to -125 and the Nasdaq turned slightly negative at the close.
The fear of course comes from going to bed with profits and
waking up the next day to surprises from Asia like we had from
Brazil this morning. Tonight will tell the tale. If Asia does
not melt and the politicians in Brazil work their magic and say
the words analysts want to hear then it is off to the races again.

At the risk of repeating myself too much, there just seems to be
nothing that can derail this market. I took a bloodbath this morning
but when I saw it was not going to get worse I jumped back in and
got some bargains at really good prices. As evidenced by the quick
bounce there were other blue light shoppers there as well.

The VIX settled at 31 after being as high as 35.48 and appears
to confirm the worst to be over.

Apple Computer easily beat the street estimates tody after the
close and more strong earnings are due out soon from MSFT, IBM,
SUNW, SLR, etc. All are expected to do well. No skeletons in the
U.S. economy so look for continued movement upward barring any
sympathy crashes overseas tonight.

Good Luck

Jim Brown




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