$(function() {
    $('ul.spy').simpleSpy();
});

(function($) {

    $.fn.simpleSpy = function(limit, interval) {
        limit = limit || 4;
        interval = interval || 5000;
        return this.each(function() {
            var $list = $(this),
            items = [], // uninitialised
            currentItem = limit,
            total = 0, // initialise later on
            height = $list.find('> li:first').height();
            // capture the cache
            $list.find('> li').each(function() {
                items.push('<li>' + $(this).html() + '</li>');
            });
            total = items.length;
            $list.wrap('<div class="spyWrapper" />').parent().css({ height: height * limit });
            $list.find('> li').filter(':gt(' + (limit - 1) + ')').remove();
            // 2. effect        
            function spy() {
                // insert a new item with opacity and height of zero
                var $insert = $(items[currentItem]).css({
                    height: 0,
                    opacity: 0,
                    display: 'none'
                }).prependTo($list);
                $list.find('> li:last').animate({ opacity: 0 }, 1000, function() {
                    $insert.animate({ height: height }, 1000).animate({ opacity: 1 }, 1000);
                    $(this).remove();
                });
                currentItem++;
                if (currentItem >= total) {
                    currentItem = 0;
                }

                setTimeout(spy, interval)
            }

            spy();
        });
    };

})(jQuery);