Complimentary Update as we kick off our stocks advisory service. This is a special initial offer of $49 for one full year of service by email. Service consists of intermittent updates (as now) when there is a call for action, and a monthly overview.

Cover all short positions at the mkt.

With the unexpectedly strong breakout in the Dow, and the Transports
decisively crossing their 200 day moving average, this is no time to be
short any stocks. Therefore we recommend covering all short positions right away at the market. There is still a case to stay short JC Penney but we don't see staying there. It's easy to cover now and to stand aside. We intentionally wanted to hedge our longs when the Dow was pressing against what looked like a quadruple top. Now we have gone through so decisively with an outside up week, the potential target could be 12,000 plus, though there will likely be turbulence at 10K, possible quite serious.

Meantime our longs are generally doing famously. Among them, we still see buying Compaq (CPQ) and NCR (NCR) at current levels since they are not unduly extended and they are coming out of a long enough base to be able to sustain much higher prices. In the event of a setback we see them supporting.

We are adding the following stocks to our buy list now, mostly with recent breakouts or following the resolution of a mini-correction.

Hewlett Packard (HWP) $70.98
Novell (NOVL) $19.75
Oracle (ORCL) $46.38
Sylvan Learning (SYLVN) $32.88
Texas Instruments (TXN) $91.34

Other stocks we are looking at include Alltel (AT), Electronic Data Systems (EDS), McGraw-Hill (MHP), PMC Sierra (PMCS), ATT (T), and Unisys (UIS).

There's a case to buy Internet Solutions (NSOL} assuming a massive upside wkly reversal, though you have to bear in mind that it has come from $21 on Sept 1 to $172 today. Judging by Yahoo, there is nothing to stop it doubling again. One day this madness could end suddenly, possibly with something coming out of the blue.

There is an embarrassing richness of immensely powerful charts and it's hard to select ones where the reward to risk is most favorable. At this point it looks like a rip-roaring January with nothing in sight to stop the charge. Even the dogs are coming to life.

Current Recommendations:
(Entry Date, Entry Price, Last Close, Code, Name)

99/01/05 54.55 55.98 AHP American Home Products
99/01/05 106.81 106.25 AMGN Amgen Inc
99/01/05 50.13 54.00 APCC American Power Conversion
99/01/05 37.08 40.58 BCE BCE Inc #
99/01/05 26.06 24.50 COGN Cognos Inc
99/01/05 42.47 44.28 CPQ Compaq
99/01/05 71.98 74.42 GLX Glaxo Wellcome
99/01/05 79.63 77.69 GNE Genentech
99/01/05 41.44 44.13 NCR NCR Inc
99/01/05 64.55 72.55 RTRSY Reuters
99/01/05 91.00 86.06 SLR Solectron
99/01/05 89.50 90.94 SUNW Sun Microssystems

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