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Author: Mike Celeste Editor: Tony Ponzo March Circulation:

Stat Sheet Week Ending March 24th 2007

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+371.0+3.1%+18.0+0.1%
S&P+49.0+3.5%+18.0+1.3%
NAS+83.0+3.5%+41.0+1.7%
Splitmaster Strategies
Basic...............0.0%
Big Dipper..............0.0%
Option Calls..............0.0%
Option Puts..............0.0%

Highlight of this past week:--- GROW, which is an active play on our Basic and Big Dipper Strategies, had a great week going up over $11 for the week.

In this Issue---
SplitMaster Basic System---
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As we mentioned before, the new split announcements dried up when the market went south. We haven't seen a decent split announcement in over 2 weeks. At this point we will be posting the new plays, so get ready for the new ones as they are announced.

Big Dipper System---
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We did work our way back to seeing all of the Dippers get into a profit position. That is, all 4 of the regular Big Dippers. That's what we had come to expect, but the severity of the downturn threw things out of kilter for a little bit. The funny thing is, that real oddball, GROW, had a fantastic week. It made a gain of over 11 points just this past week. That stock has caused us more concern than any stock we have ever followed. Strange as it may seem, some of our team members have been playing it up and down a number of times. Bernie, in particular, has played it 4 times now, and each and every time he has made a profit on it.

Options---
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We mentioned Bernie above, but he is also doing very well in options, based on the Momentum system. In particular, Bernie has his own timing system, once we post the stock to be played. Other beta test members are reporting good results, too, and that means that they are grasping the finer points of deciding when to get in and out of the play. We really enjoy it when we get reports of members that did even better than our own results--not all the time, but often enough. Tony does a good job of giving instructions on planning the timing of entry and exit, and it still amazes me how the plays string out and do what is expected.

There was one particular play on Thursday that caught my attention--BKS. The play was a PUT and it was doing as is was supposed to do, and when it reached the point that looked like a good exit number, an order was placed. This was for an April 40 PUT, with the stock dropping to 37.54. That means the true value of the option was 2.46. The order was put in at 2.55, just 9 measly cents above that level. One would think that with 3 1/2 weeks until April options expiration, asking for a 10 cent time value was not asking for too much. That market maker would not let it go at that 10 cent level, or 2.55--keeping it at just 5 cents, or 2.50. Maybe that is a good signal that the stock price is going to turn around, or it means that the market maker doesn't want to be a real market maker. At any rate, the price didn't get off and the sell order price was dropped some. On Friday, of course, the time value was back up to 35 cents, but the stock price had risen about 50 cents, too. Since the time value should change only by a few cents per day there is no legitimate reason for making it 5 cents one day and 35 cents the very next day--but those guys are in the business to make a profit, and if we could only figure out their thinking, we could plan our strategy accordingly. However, it was a profitable trade, and the Momentum plays are continuing to do very well. There will be more of them as April comes into play, when more earnings are announced, so we are looking forward to them with great anticipation.

 The Momentum Strategy - A Good Week---
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There is not a lot to talk about this week as we only had two plays. Momentum Past Results-- hat is because the quarter is coming to a close. However, both of these plays were profitable with SYX making a 26.19% profit and BKS making a 14.63% profit. As Mike said above, BKS brought a bit of frustration in the exit. We should have had a bigger profit but the market maker just would not let it go at our first order price. So we had to lower our price. But that's OK. As long we can make a profit, we'll take it. And we want to point out that on SYX, the SplitMaster team actually missed the play. But we had a good number of members who got in the play and the numbers on the Momentum Past Results are based on the average of the members who reported to us. That is why the posting has a red asterisk. It notes a members' play as explained at the bottom of the Past Results page.

We don't expect many plays next week either but we think there still could be one or two for the week. We'll see what next week brings.

Chart Indicator---
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The CI has come all the way back from being negative to a confirmed positive. That is very encouraging, even tho we are in the early stage of that recovery. We want to see this level continue to hold and the longer it holds, the more strength it will have. This continues to be a very valuable tool.

 The Economy & Commentary---
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The economy is showing more and more signs of being able to avoid a recession. The Fed gave indications that they are satisfied with the general economy, even tho the sub-prime mortgage market has taken such a hit. It's too early to tell what total effect the mortgage financing sector will have on spending and jobs, but it seems that reports coming out, point to being able to handle that and still keep the economy on a course that doesn't lead to recession.

This past week was a huge week for the major indexes, so it would seem that investors read good things into the reports. The Dow had its biggest rise in 4 years, for a week's time, rising over 3% in just this one week. Nas did a bit better, percentage-wise, rising 3.5% for the week.

Boy, the volatility is really something, isn't it? Big drops and big rises. We can't seem to make up our minds which way things are going to go. At least, tho, we see the big rises following the declines, so we seem to be headed in the right direction. These moves are over a week's time or maybe a bit longer, with large moves up and down on a daily basis, too. This action is especially good for the Big Dipper play. When we are looking at the Momentum plays, we see this point exaggerated, with stock prices moving both up and down sizable amounts during the first couple of hours of trading in that one day after the earnings are announced. Many times, it seems that investors can't determine which way the stock is really going to end up that day. Good earnings may see a selloff on profit-taking, followed very quickly by a recovery or the same thing happening when earnings are seemingly bad.

Our strategy is based on determining which way that stock is going to go at a certain time and playing the right option -- and by far, it ends up going that way--at least long enough to make a very nice profit on that move. We like volatility---that means it doesn't go in just one direction, because one direction makes for very nervous times. Keep watching the plays, splitters and earnings.

 Today's Thought---
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Turn your face to the sun and the shadows fall behind you.................

Mike

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