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

Stat Sheet Week Ending April 28th 2007

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+159.0+1.3%+658.0+5.3%
S&P+10.0+0.7%+76.0+5.4%
NAS+31.0+1.2%+142.0+5.7%
In this Issue--- SplitMaster Basic System---
*****************************
This week we are going to ask for something from all our readers. That is concentration. We want you to concentrate positive thoughts on the splitters. Let's see if sheer willpower can do its stuff. We at SplitMaster are firm believers in positive thinking and we even have a favorite character we talk to--Prag, which is just our reminder or trigger to use positive thinking whenever it is needed. Prag even finds us good parking spaces at the mall. Also, positive thinking is good for the health. Personally, I am a very firm believer in negative thinking causing health problems. Many people I know that I consider negative thinkers also seem to have a number of health ailments. Anyway, we are coming up on a new month and new splitters are coming in. We, in essence, are bettors on odds. We have 31 straight years of positive results behind us when dealing with splitters. We like those odds.

Big Dipper System---
************************
The BD is slowly building up a longer list of potential plays. We know that the hits on this program usually come from just a few sources. Downgrades, secondary offerings, severe weather like hurricanes, or general market conditions. We think it is good to be in position to take advantage of the dips when they occur, and with more stocks on the list, the greater the chances of getting hits. We often repeat that splitters come from companies that are doing well. If they take a dip for some illogical reason, we like to be there to pick them up at what we consider bargain prices.

 Options---
************
While options continue to be active on the Momentum Play we haven't had too much lately in the split program. This will change next week, with a new play coming up on Monday, and with more to follow.

 Momentum Play - This Week---
*********************************
It was a rough week. We had our first net loss, for a week. There were two wins and two losses. Unfortunately the losses were a little bigger than the wins. Momentum Past Results. So we looked at what caused this to happen. Was it just a bad week or are we missing something? Here is what we came up with. For the most part it was just one of those weeks but, if you look at the losses you will see that they were both PUT plays. In a normal trading week they would have won. But this week was such an extraordinary up week in the general markets that anything going down, had a hard time staying down and so these two plays drifted back up instead of following their usual patterns. The one play BHI, was actually an up play but we missed getting in early and it shot straight up. Our signals had shown that it peaked so we went into a PUT play. Again, normally that would have worked but this strong positive market kept it climbing up. So we'll watch for this kind of situation next week and I think we will also move faster to get out of a play if it is not going in the right direction for us. On these two plays we probably were being too loyal to our decision. It just shows that, if at all possible, these plays have to be made with very little emotion and more on logic. If it isn't working, get out and cut the losses. Sure, there are going to be times when it turns around later in the day to the direction you wanted , but those times are few and not worth the emotional roller coaster. It is best to just move on to the next play. That is how we plan to trade it this coming week. And we are expected a return of a positive trend.

Chart Indicator---
*******************
There is no guessing here on where the CI sits. The Dow made new highs, with all the major indexes rising, also. The CI was positive the week before, and it was positive this past week, too. A note of caution, tho. The spread to break-even is at +109, which is a definite indication of the markets being overbought. We have marked this as a "Caution" on the Big Dipper page at the top, for team members to check out daily. On a positive note, there have been times when the markets temporarily back off a very short period, and then resume upward moves. Some traders can take advantage of these times.

 Stock Split Comments---
****************************
We have been saying that we expected more split announcements to be coming out, and this past week, there were 5 new announcements. Most of them are for plays in May, so get ready. We expect the announcements to continue, also, but we definitely don't want to see a repeat of last year, when there was a very long list of splitters and then a major market crash. We are keeping a very close watch on the markets as May approaches.

 The Economy & Commentary---
*******************************
The major indexes have been on a tear lately, as we have all seen. Well, how is this put into perspective when compared to other years, etc. The Dow continues to defy the odds, now being up 19 out of the last 21 trading days. That is nothing short of incredible! We have watched the markets and it was pretty clear to us that the indexes just did not want to fall. Every time there was a slight pullback, you could see the buyers come back in and push to wipe out any losses. We had also said recently that April was the best month of the year for the Dow. There was one media statement that this April is the best one since 1999, when it was the first month ever to gain 1000 Dow points.

OK, no question the major indexes are on a tear, but what about the economy. That seems to be a different story. We are still seeing inflation, primarily in the energy field, and specifically related to gasoline. The worst part of that is that oil inventories are on the increase, while the refineries are producing far less than capacity. Sure, the refineries always have their answer to explain that, but it just doesn't wash, as usual. Also, as usual, nothing is being done about it. Prices here in our area of CA are $3.25-3.49/gallon for regular. Don't tell me that people aren't affected in their spending habits.

Housing now has few believers that the bottom has been reached. The lending problem is still far from solved, the foreclosures are increasing at a rapid rate, and that is going to affect consumer spending. The mathematics of it says it has to. With mortgage companies finally tightening up their lending policies (closing the barn door after the horses have already left) there will be fewer buyers available to borrow, so sales are expected to continue to decline. Some areas have already seen price declines that are a bit more than moderate (especially if you live in that area and have to sell) and it would seem to us that further declines are in the works, with the declines spreading to most major areas of the country. There are always pockets that go the other way, but they will probably get smaller and smaller as time goes on.

So--the BIG question. What is in store for us in the near term? Doggone if I know, that's for sure. We have pointed out that it is dangerous to try to buck the momentum of the market, and the stronger it gets the harder it is to break it. On the other hand, the rubber band stretches and the more it stretches, the bigger the snap-back when it releases. That pendulum always reaches a max point and then starts swinging the other way. We just let it go by saying that we definitely advise caution.

Today's Thought---
*****************
Anyone who stops learning is old, whether at 20 or 80. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young..............Henry Ford, Founder, Ford Motor Company.


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.