SplitMaster.com:: Newsletter
Home :: Strategies :: Membership :: Past Results
Author: Mike Celeste Editor: Tony Ponzo December Circulation: 7343

Stat Sheet Week Ending December 16th 2006

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+139.0+1.1%+1.0+16.1%
S&P+17.0+1.2%+179.0+14.3%
NAS+20.0+0.8%+252.0+11.4%
Splitmaster Strategies
Basic...............+22.4%
Big Dipper..............+40.6%
Option Calls..............+175.0%
Option Puts..............+225.0%

Highlight of this past week:---EZPW---options were closed out this past week with the CALLs showing a nice 72% gain and the PUTs racked up a 100% return.

Special Notes--
We will not be sending a newsletter next weekend so we can concentrate on celebrating Christmas with family and friends. Also, there will be a shorter newsletter sent on New Year's weekend. This is the time of year that family, friends and giving are what we like to pay attention to. It would be nice if we could do it all year, but we certainly don't want to miss the opportunity at this time of the year. We hope that you all find joy and contentment with those you care about.

Important Email Issues
There has been a continuing email problem with many internet services unable to get delivery of email to those that want and need the email. It seems every time our tech people get one problem solved, the servers create another one. Rest assured that we do not originate these problems. Here are 2 attempts to be of help to you in this area.----

To prevent the Splitmaster emails from getting swept up by overzealous email filters, please add our addresses (news@splitmaster.com and staff@splitmaster.com) to your email address book. Also, if you have any settings or filters that you can change concerning the receipt of emails, put these same addresses in as approved addresses.

Very similar instructions are being put into other publishers newsletters in our industry, such as the Motley Fool, so this is a common issue at this time.

Here is the Hotmail solution that worked for my personal Hotmail account (we send them to ourselves so we know if they are being received).

Go to Hotmail web site and sign in.
Click on Mail
Click on Options--upper right of page
Click on Custom Filters under "Mail Options"
Click on New Filter
Check and Fill in box at "are from the e-mail address" with news@splitmaster.com
Repeat the above and fill in staff@splitmaster.com (so you can receive answers to your emails, etc.)

In this Issue--- SplitMaster Basic System---
*****************************
At present we have 4 plays in the Basic system. Three of the four are above our buy price--not a whole lot higher, but higher. The one that is losing is a real puzzle to us. EMR was a topic on Cramer's TV show on CNBC, where he spent about 5 minutes raving about how good the stock is. The dividend was raised 18%, and that was noticeable because the normal dividend increase in EMR has been in the 3% range. Cramer said the company was throwing money at the investors. He said it also looked like an indication of the confidence the company has in the future. It is to be sold this coming week and it would be a nice Christmas present to us to see the stock make a nice move up before that.

 Big Dipper System---
************************
We continue to see the reason for our potential Big Dippers not hitting our target buy price. The market continues to be strong and there aren't any dippers very close to hitting the target price. And--no downgrades by the "experts", which is the number one reason for dips. We have one splitter that is about $1.50 above the target buy price, so team members should make sure they keep on top of it, if they don't already have a "Good Till Cancel" price order in on it. Don't forget, too--we post the closing prices daily on the site page.

Options---
************
This is when the term "Cut and Run" can be a good thing. EZPW had a nice profit showing in the CALL on our list, so we took the opportunity to send an alert about selling early. It was a nice 72% gain and we didn't want it to get away, as the percents are so volatile in options, as we all know.

We did let the PUT continue to be a play, looking for it to expire worthless on Friday, 12/15. The PUT did expire worthless, so we see a 100% return on that option. We need margin for this type of transaction, and since the margin usually comes from other stock in our portfolio, we don't have to spend any cash on this. We continue to feel that writing puts is a good strategy. Yes, they can bite you, but in the long run, they have been exceptionally nice to us.

Tony writes up the Momentum Play comments, but I want to mention my viewpoint on it. My mood swings can see wide ranges, and right now the Momentum program is getting me very excited. It is tricky, but sharp day traders can see that the results posted on the site are very worthwhile. The logic is there, too--and I really like logic. Since it is based on earnings reports, it is quite understandable that there will be some quick movements in some stocks on those days. Tony has been fine-tuning this by actually making the transactions. It is fun for me to sit back and watch what happens. You know the feeling---watching is a lot easier on stress than actually putting up the money and doing it. So far, the results have been excellent, as Tony brings out. It is a good opportunity for experienced option traders to even outdo the posted figures. This past week I saw one of the CALLs increase 500% in that ONE day. It was a cheap one, too. The CALL went from 25 cents to about $1.25 on BCS. If you go to the Past Results page, tho, you will see that it was "only" a 100% winner, in the actual play. To see how evil I can be, I can tell you that I actually enjoy watching Tony at the computer during these times. I would be the same if I personally invested, so I'm not making fun of him, I'm just saying it is less stressful to watch instead of being in it---of course, I don't get the profits, either, and I'm looking forward to that stress, actually. Being a day trader is definitely stressful, but if you can take it, we think this system has terrific potential. Tony is opening it up where everyone that is interested can receive the daily emails on this.

Momentum Play - This week---
******************************
We had a number of potential plays this week even though we are at the end of the announcement quarter. However, we did not like the action on a number of plays so we did not pull the trigger. So all in all it was a quiet week with only two plays. One of the plays was a small loser and one was a nice winner. BSC was our winner and like Mike mentioned above, it was a 100% winner in about one hour. That's a pretty good return but it could have been a lot more if we had followed our own instructions. The night before we sent out the email to the testers to get ready to trade BSC as we do for each play. In that email we said the stock had a nice history of gapping (usually up) a few dollars and then slowly continuing on its move all the way to the last hour of the day. We got excited when it hit a 100% return and sold but that darn stock did exactly what the history says and continued on. By the end of the day, as Mike stated above, we could have easily had a 500% profit. That's OK though. You never know what could happen and 100% in one hour is a great return. You know the old saying - "Bulls make money and Bears make money but Pigs get slaughtered".

Anyway, click on this link and check the reults. Past Momentum Plays.

Chart Indicator---
*******************
How long can we expect the CI to remain positive? I know we would like to see it be this way indefinitely, but realize that someday it will make the move into negative territory. However, that being said, we keep saying that we like the 4th quarter and we are still in the 4th quarter---so, we don't know of a specific reason why it would go negative in the near term. The next period we look for danger is after the 10th day of January, 2007. That is an annual time when we expect to see a market pullback. For the present, tho, enjoy this long run on the positive side.

 Stock Split Comments---
****************************
The list of split announcements shows that there are splits being announced, but the main problem now is finding those that qualify for our systems. The main criteria that is the drawback recently is the daily volume of the splitter. To be on our list we have to see enough volume that will support liquidity and ease of entering and exiting a position. We don't want to cheapen our program, so we will go along until splitters do qualify.

The Economy---
*****************
The economic news this past week continued to be mixed--highlighted by the fact that the Federal Reserve did not increase the rates. A general consensus by the "analysts" is to expect slower growth and lower inflation. Mixed feelings, it would seem.

As you know, we watch certain sectors closely. We feel that these sectors do affect the markets, too. Mostly the energy and real estate areas lately are at the top of our list. There was a release of info this past week related to the real estate area here in southern California that caught my eye. During times of appreciating home prices, it is a known fact that people spend more just based on the psychological thought that more equity relates to more money in our pockets--not true, but the feeling is still there. More spending, of course, helps companies that have listed stocks. More earnings mostly means higher stock prices--and even paper profits gives another psychological boost to spend. Anyway, on Thursday, the Los Angeles Times reported on current prices in our area. San Diego County was the first county to lead the increase in home values and it is leading in the downturn in the market. Other counties are following--first the rise and now the other direction. The report said that the SD County median price for all homes dropped 6.9%. That "masked the 13.8% plunge in the median price of new homes and condominiums" according to the source, DataQuick. Compare that comment to another one in the article---The director of a real estate forecast stated "Even with prices flattening, it doesn't mean that we're in a serious housing downturn. My point---One source uses the word "plunge" when referring to prices, while another source uses the word "flattening" for prices. Hey, call me crazy, but a 6.9% drop in prices in one month sounds like more than a flattening of prices. Technical people are always getting criticized for wanting too many definitions for statements (I drive people crazy that way), but doggone it, understandable communication is one of our biggest problems. What means one thing to one person means something else to another--and it should be clear what a person means when they say something. To compound the problem, definitions seem to change--ie.--"soft landing" for real estate. The "experts" used to say a soft landing was a flattening of prices--now the same people are saying a soft landing is a price decline, but not a severe price decline.

Give me a break and stick to one definition--and be right or wrong about it.

Fair play??? This news article also caught my attention. J. Skilling, the former Enron Chief Executive, sentenced to 24 years for his role in that debacle, was also ordered to pay $45 million in restitution. It was noted that his house, valued at more than $5 million, will be sold to help pay that restitution to his victims. HOWEVER, he is allowed to give half the proceeds from the home sale to his three children. My question--Is that really fair play for the victims? Noticeable to me, there were no comments from any victims in that story in the paper.

Final Comment--The color black relating to a day of the week, and how it is used to describe something.----
Black Friday---A good term---relating to the day after Thanksgiving when retailers see great surges of people shopping--putting the retailers in the "black" or into profits.

Black Monday--A bad term--relating to the Monday in October in 1929 when the stock market crashed. Every year since the markets are worried about possible repeats of this.

Tricky stuff, this English language.-----

 Today's Thought---
*****************
Success doesn't mean the absence of failures; it means the attainment of ultimate objectives; it means winning the war.....Unknown


Mike


Published by Splitmaster.com, LLC.
P.O. Box 960 San Dimas CA 91773
Copyright © 2006 All Rights Reserved.
Privacy Policy

To unsubscribe from our newsletter or edit you delivery address go to our Newsletter Page. To edit membership information login to the Splitmaster.com members page. For inquiries regarding this or any other Splitmaster.com Information Delivery System publication contact us at staff@splitmaster.com.