SplitMaster.com:: Newsletter
Home :: Strategies :: Membership :: Past Results
Author: Mike Celeste Editor: Tony Ponzo April Circulation: 7283

Stat Sheet Week Ending April 7th 2007

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+206.0+1.7%+97.0+0.8%
S&P+23.0+1.6%+26.0+1.8%
NAS+49.0+2.0%+56.0+2.3%

Highlight of this past week: GROW -- A FANTASTIC come-back


In this Issue--- SplitMaster Basic System---
*****************************
FANTASTIC !!! That's the only word we can think of to describe the action in our long-time hold on GROW. The stock completed its comeback in our books, rising 17.38 pre-split points just this past week, and a 4 day week it was. This stock had dropped so very low due to what appeared to be manipulative attempts by hedge funds. The company reported great earnings and we felt we just had to believe in them, so we waited out all the doings and when the stock finally split, it did its stuff. The stock hit a low of 35.02 in March and went from there to a high of 69.90 this week (all pre-split prices). As we have said before, this stock was so unique it was the only stock we have ever seen that had to go thru something even remotely close to this. We had the patience and having learned from other fast movers, there was a time to get out. We didn't wait until the official sell date, but sent an alert to sell and closed it at 68.80 pre-split, 34.40 post-split. The stock went up another 55 cents after that, but we are extremely satisfied in seeing a nice profit get posted. It was even more satisfying when we looked at the price at the close of the day and saw that it was 30.00---or 8.80 pre-split lower than our sell price. So, we gave up some cents from the high, but avoided that 8.80 drop. Our team members that held on were also extremely happy. Some were in the stock at the low 40's, even, so they are going to have a real enjoyable Easter weekend.

Big Dipper System---
************************
The Big Dipper goes rolling right along, with GROW and RSG closing out this past week, and both were winners. That makes the Big Dipper still a 100% winning system for 2007. The logic of this system is what we like so much. If splitters are winners (since 1975--and probably before), then they should do even better if they take a dip during our holding period. Again, they have been, year after year and so far, this year is no different. Now we know there are losers and there will be losers in the future, but the historic logic convinces us that there should well be far more winners than losers. That's also why some of our team members pick just this system to play--especially when working with limited capital. We try to have some kind of system for everyone.

Options---
************
Yes, we finally cleaned out the options list on the splitters and are eagerly awaiting new plays. The options in the splitters got off to a rough start this year, but the Momentum System options have given us a new area, earnings reports, and those results are exceptional, in our opinion.

Momentum Strategy for Day Traders---
****************************
There is not much to talk about on the Momentum Strategy as there were no plays. Remember, this week and next week will most likely be very quiet as there just are no announcements during the first two weeks of the new quarter. But then, they will start pouring in.

We are opening this play up to all level 2 members very soon so if you are interested, send an email to SplitMaster to let us know and we will bring you up to speed on how the play works.

Chart Indicator---
*******************
The CI made its directional move this past week, after closing the previous week at exactly neutral. Happily, the direction was up and the Indicator is clearly in positive territory. This also gives us confidence that new plays are going to be on track. Of course, the direction could turn again, and will at some time, but for right now, we are looking pretty darn good.

 The Economy & Commentary---
**************************
Surprise, surprise---In the housing sector, New Century Financial filed bankruptcy. Remember a while back when the "experts" were writing that the company might not be able to stay afloat. They said it "might not" make it. Our comment was to ask how it was even possible to think it COULD stay out of bankruptcy. When you are in the business of loaning money and you have to have a source of supply for that money, it seems that when the source(s) refuse to supply any more money, you are not going to avoid bankruptcy. So, this week, the bankruptcy was filed and it made the front pages of the news. The stock trading was also suspended. It wasn't any surprise at all to our readers.

Another surprise in the housing sector was a rise in pending sales of existing homes. Keep in mind that these are "pending" sales, and that means that the sale has not been completed. While that was encouraging, it was barely higher and could be a blip. We haven't seen the full results of the sub-prime mortgage market collapse yet, altho a couple of smaller companies did fold this week. Analysis seems to lean to the belief that the economy can withstand the problems in this area. We hope they are correct but we'll see.

A somewhat related article of interest came out in the newspaper, written by Archie Richards. The interesting part of his article was saying that stock investments showed far better returns than home appreciation, even in the hot real estate areas (at least they were hot, anyway). He states that Freddie Mac, the home finance corporation, reported that overall U.S. house prices over the last 30 years have climbed only a little over 6% a year. Stock prices, on the other hand, have appreciated almost twice as fast. I still like the idea of having my own home, and of having it paid off. At my age, taking out equity to invest in other things, including stocks, doesn't appeal to me. I learned a long time ago that it is better to diversify. Yes, put money into stocks, but also have the "good-feeling" security of paying off the home mortgage. Playing the devil's advocate a little bit, someone with real talent can swing money from one type of investment to another. That is, not entirely switching all your money, but different percentages. When the real estate market is a screaming bargain, the pendulum (yes, the same pendulum we refer to from time to time--it never stops swinging) could indicate more allocation of funds can be used in that--and also vice-versa. Warren Buffet is the master at timing. He doesn't buy anything unless it is of huge value, in his eyes. There is a time when different sectors rotate favorability and Warren (I can be on a first name basis here, you notice---we are in the same business, investments) does his homework well and knows when to get in. Even he, tho, is not right 100% of the time. The secret is to be far more right than wrong. That much we realized ourselves, as young adults. Mathematics and odds taught us that. Be right more often than you are wrong and you will end up alright.

Earnings reports will start coming out shortly and it will do two things for us. One, it will give us a clearer picture of what the first quarter of 2007 was like, and possible indications of what to look forward to in the upcoming quarters. Two, the reports will give us a whole lot more opportunities to be working our Momentum plays, since they are based on day-trading right after the reports are issued. We have a tight criteria on which earnings reports qualify, so they won't all be a trade, but we can guarantee you that our staff will be putting in long hours going over the potentials. This is not only tiring work, but exciting work, as we are challenged to keep our winning percent of plays in the 75-85% range. More to come.

Hey, the Dow and Nas have been up for 6 straight sessions (and the Dow has returned to the plus side for 2007). The RSI on the Nas is very high and that, along with our own rule about being up "x" straight days, gives us mixed feelings. We are happy to see the up days, that's for sure, but we might expect a little profit-taking soon. I hope we are wrong, but even if it does happen, we remain confident that the overall direction is up. Patience and confidence is our approach and it has paid off over the long run, so we see no need to change to long term pessimism and fear. We do always remain on the alert, too. That pendulum does swing, doesn't it?

 Today's Thought---
*****************
Be careful reading the fine print. There's no way you're going to like it.

To those who celebrate it, we wish you and your family, a happy Easter!

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.