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

Stat Sheet Week Ending February 24th 2007

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow-121.0-0.9%+184.0+1.5%
S&P0.0-0.3%+33.0+2.3%
NAS+19.0+0.8%+100.0+4.1%
Splitmaster Strategies
Basic...............+3.3%
Big Dipper..............0.0%
Option Calls..............+32.0%
Option Puts..............0.0%

Highlight of this past week: Momentum Past Plays--continuing to have a hot hand.
In this Issue--- SplitMaster Basic System---
*****************************
We made some criteria adjustments and want to say that postponed buys and sells will be posted next week. In the meantime we have six active picks going in the Basic program, with three more buys coming up next week, to finish out February. In addition, at this point, we have 3 splits of the 2-1 ratio and 1 split at 3-2 coming up for March buys. There will probably be more as they have been coming in a steady flow, but that is what we have lined up for the present.

 Big Dipper System---
************************
We seem to be caught in a mid-range on our splitters. We don't have any upside runaway plays and we don't have any that want to dip enough to hit our target Big Dipper buy prices.

 Options---
************
We want to point out what is happening to options as they apply to the Momentum plays. Please keep in mind that this program is a one day play. That means in and out in the same day--usually and by rule. While we are trying to be conservative and consistent, at the same time, it is very interesting to note the price ranges of the options during this one day. On Thursday and Friday there were 3 stock potentials. Here is what the ranges were on the options selected---WFMI had a low of 4.15 and a high of 7.55, or a range of 3.60. ANF was 4.70 to 6.00, or 1.30. ROP showed 4.20 to 6.60, or 2.40. Yes, all in the same day--and in fact, usually within the first 2 hours of trading. You can see how conservative we are as we try for $.30 to $1.00 in these options. The feedback that we have been getting has told us that many of our team members are doing better than our conservative numbers. We like that, and applaud them. It is satisfying to see that they are getting more comfortable with the hectic action of the opening prices each day. The goal, besides making profits, is to get into a familiar rhythm when trading these markets. If you can do that, and if the system continues to follow prescribed patterns (all the work the staff does to find those patterns), the profits will come. Now a word from Tony.

 Momentum Play - Ready to Publish?---
*******************************
We had another winning week. There were only three plays on a short week that the SplitMaster team made but there could have certainly been a few more plays and all big winners. The team missed one play because it did not act fast enough to go in and the stock took off, giving what would have been, a great play. On two other plays, we put our orders in but just missed getting executed and those stocks would have also produced a nice win. Some of the testing members however, did get into these plays and did well. But we had a good week with two big winners and one loss - and still way ahead in the win column. Click on this link and check it out: Momentum Past Plays.

We have been testing this play with real trades since October of last year. All in all, we have an 80% win rate and an overall profit percentage of about 13% per play. Remember, that is on a less than a one day play. That means the money you invest is in and out in a day. I'm not going to even put down what that percentage rate would be annualized but suffice it to say that rate would be in the thousands of percent.

So with all this in mind, we believe we are ready to officially publish the Momentum Strategy in the near future. This strategy however, takes a lot of hours and effort from the staff to produce so this strategy will most likely come out as higher level of service or a Level 3 membership. One win though, can easily pay for a monthly membership fee. Of course members that are active as a Level 2 member at the time we first publish this strategy will be "grandfathered" into this Level 3 membership at no extra charge if they choose to play this strategy. Likewise, active Level 1 members would only have to upgrade to a Level 2 cost to be "grandfathered" into Level 3. Further, since we think at some point, too many people making these trades could affect the play, we are going to limit the number of members in this strategy. We have not picked that number yet as we need more studies but the bottom line is, once we reach that limit of Level 3 members, the only way a new member will be let into Level 3 is if a current member drops out. We'll let you know more in the weeks to come but for those of you who have been thinking of signing up as a Level 2 member, you may want to do it soon to take advantage of the "grandfather" upgrade. For those that are interested, keep reading our emails as we will keep you informed of the dates we will officially publish this strategy.

Chart Indicator---
*******************
The CI has been rather quiet and just seems to be doing its thing. The Indicator has remained fairly well above the Pos/Neg line and is sailing along in Positive territory. For the most part, it has been that way for quite awhile now---and not trying to put a jinx on it, either.

 Stock Split Comments---
****************************
We had a rush of splits for the last 1/2 of February, and it was nice to see that it quieted down a bit as far as split announcements go. As we said above, we still have some more buys for Feb., but they were temporary postponements. Looking ahead to March we currently see three 2-1 split buys and one 3-2 Big Dipper potential for March consideration.

The Economy & Commentary---
***************************
While the economic news from this past week is about the same as recently--mixed--we do notice something rather interesting. The major indexes have deviated somewhat this past week. The Dow had been up 5 straight days, and then went down every day after Monday. That was after making new highs for that index. The Nas, which had been under the recovery highs of Jan. finally pushed over those marks and showed a gain for the week. What does it mean? I don't know, but it is interesting to see them diverge.

Commentary--
We had something occur that hadn't come up before, and thought we would share it with everyone. One of the splitters on the Big Dipper list, CMCSA was purchased for one (maybe more) of our team members who had a GTC order in at the BD buy price---even tho the posted low price for the day was about 34 cents above our target buy price. The only thing we could think of to explain it was that it might have been sold to her out of the broker's in-house supply. We ourselves have seen this in our own transactions, from time to time, but never that far from the buy target. At any rate, we want to point out that everyone should keep track of their transactions, even if they are auto-trading with a broker. Because we never saw the lower price hit, we didn't post it, and the member was rightfully confused. The net result of this particular trade, happily, was that she was bought in at the Big Dipper price and sold/closed out at a profit. Bottom line--we're very happy to hear it.

Comments about our other testing systems--and even newer developments. Our RSI studies continue to be in the early stages, but show great potential. This would be a short term trade of about 1-4 days, maybe stretching into a week. So far the results are promising, but our criteria is far from where we need it to be. Actually, the research is really fun for all of us here at SplitMaster. That's especially true when we can come up with a positive program. We continue to look for strategies that will show profits in both an up or down market---and we are applying that more to our split study research, too. We have strong feelings that there are multiple plays available during the split run, once the split announcement is made and going until "x" time after the split day.

The Momentum plays have spurred a great deal of interest, from both members and our staff. We put on our thinking caps and sat around to brainstorm about this system. The Momentum system is based on reaction from earnings reports. The staff determines which earnings, out of hundreds that are released, has shown tendencies to move in certain directions after the announcement is released. In exchanging thoughts we wondered what research would show if we analyzed the price movements a few days past the earnings release. So, we went back to take a look at what happened. After trying one set of criteria and then another, we seem to have come upon a pattern that repeats itself. No, we do not have enough statistics to declare it's a definite go, but with a tweak here and there, we have settled on a set of criteria that we would like to expand to future earnings. Let me tell you, it is getting to the point where I want to see the weekends over in a hurry, in order that we see these tests continue. Starting back at 1/17/07 and using the potential Momentum plays that we determined were fit this criteria, we came up with 7 winners and only 2 losers. The losers were not of great magnitude, so that was nice to see, even at this early stage. This is sort of a Momentum Reversal system. We are still looking for consistent, smaller profits at this time, just like the regular Momentum play. Also, while the MP (Momentum Play) is a one day trade, the MR (Momentum Reversal) is a 1-4 days play--and looking for a min. $1 gain in the play. Just so you have something to look at, here are the winning Reversal plays---1/17, LRCX--1/25, BTU--1/26, HAR--2/8, ACL--2/8, BGC--2/9, ENER--2/12, ASF. The two losers were--2/7, RMD--2/7, EXBD. Personally, I am watching to see if ROP and RRGB, whose earnings affected Friday's prices can meet the criteria for Monday's open. If they do, we would be looking for a down move of $1 or more in the next 1-4 days.

There you have it, folks---lots to look at. For those that enjoy digging into these plays, we hope you are interested in checking them out. Feedback is always welcome and we answer everyone as promptly as we can--for, as we always say, this is a 2-way street--we learn from each other. Over the years we have had a great number of suggestions, comments and questions--and all were welcome.

 Today's Thought---
*****************
The very first step to building wealth is to spend less than you make.....Brian Koslow
(A lot harder than it would appear to be.....Mike)


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.