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Author: Mike Celeste Editor: Tony Ponzo July Circulation: 7252

Stat Sheet Week Ending July 7th 2007

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+203.0+1.5%+1.0+9.2%
S&P+27.0+1.8%+112.0+7.9%
NAS+64.0+2.5%+252.0+10.4%

In this Issue--- SplitMaster Systems---
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Altho this was a short week, it seemed like cleaning house, with 5 splitters closing out during those 4 days. Other than that, things were pretty quiet. So now we are working to get more plays back on the board. We have noticed that on a number of occasions, that during the trading day, we have received a buy signal from our new software for new splitters on the Basic Strategy. By the time the day ends, the stock has already moved up a point or two. So in order to take advantage of the signals, we want to start sending these signals as they happen to take maximum advantage rather than wait to send the signal for the next morning. Auto traders will really be able to take advantage of these intra-day signals as trades will automatically take place. For those that are not able to get the signal immediately (off at work, etc.), let us know if you have a work email or other alternative email that you can check from time to time throughout the day. This is not as fast moving as the Momentum trades so in most cases, if you do not read the email signal immediately, you should still be able to take advantage. Sometimes you might even be able to get a little better price---a lower buy or a higher sell. If you have any questions about this, send us an email.

 Chart Indicator and Others---
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All we can say is WATCH OUT, based on our indicators. The CI is definitely positive, but so positive that the spread number we use is definitely showing we could be in an overbought condition. It is currently at 90, and anything 80 or higher is our signal. In addition, our "W" indicator is showing 4 straight days of readings from 96 to 100 and anything over 90 shows overbought. Our 3rd indicator, the Nas daily, is showing 4 straight days of gains, which usually tells us that it is overbought---in fact, often 3 straight up days usually sees a down day after that. We are not suggesting that a major correction is coming. We are just saying that we are due for at least couple of down days soon.

Momentum Plays - This week---
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There were no plays this week due to the lack of earnings announcements as was expected. This coming week looks to be pretty quiet too but we'll keep the members posted. The week after though, has us back in the swing of things.

 The Economy & Commentary---
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The major indexes started out July with a bang that did credit to fireworks on the 4th of July. Our chart above shows the weekly results and the question comes up as to what spurred this solid gain for the week? We think that most of it has to do with momentum, that swinging of the pendulum that we often talk about. June was a losing month for the markets and it looks like the early drive of the markets resumed. Trying to fight the tide is a tough thing. There were some major negative factors that were completely overlooked, led by the price gains in oil. We see prices at a 10 month high, trading at $72.81/barrel. Interest rates went up. Higher interest rates mean higher mortgage rates and that means fewer home sales. The employment report came out Friday and it showed an increase in jobs and unemployment held steady. Incredible to me was a statement from the co-head of equities at Cowen & Co., saying that higher yields in interest rates is actually good for stocks, if there's growth in the economy. Only a very short time ago, rising interest rates and more jobs was considered a negative because it increased the threat of inflation, and that could mean the Fed could use that as a reason to increase rates. I've said this before, and will most likely say it several times again---The same factors in the economy are considered positive or negative, depending on the emotion of the market at the time. My feeling is that more people working and more jobs available is good for the economy, but higher interest rates are not. Inflation is here, there is no doubt about it---the only question is who is figuring the numbers and how do they do it. Us consumers KNOW there is inflation.

We know it is getting harder and harder each year to keep our standard of living the same and we know that the rich are getting richer, with the middle class getting smaller and smaller. We can only fight it the best way we can---get the best education possible, be as knowledgeable as you can about your own money and how you spend and invest it, for no one cares as much about it as you should (not "as you do" but "as you should"). Think long and hard about important decisions that have to be made in life. Don't count on the government to take care of you--unless you are a big donator to the major political parties. It's always amazing to me that the politicians actually think that people believe that big donors don't have any more influence over them than the average Joe voter. Try and get a personal appointment with your senator, for instance, if you are not in that group of big donors. Isn't it so surprising that those donors receive contracts, etc., just coincidentally to the fact that they are big donors? Oh well, we have the earliest presidential campaign ever going on right now, and we are going to be hearing how many things they will do for us---if we elect them. Better days are ahead, no question about it--if the candidates are to be listened to--and believed. Out here in the Los Angeles area, we are having a ball as politico watchers. The ambitious married mayor of LA admitted to having another affair, (he has 2 adult children outside of marriage, a given fact) and this time it is with a reporter for the Spanish TV station, and she was the one reporting on TV about the mayor announcing his marriage problems. Of course, she didn't say that she was the other woman.

Then, the LA district attorney, who raised a big ruckus about Paris Hilton being released in a few days from her jail sentence, was found to have had his wife driving a city vehicle, get into an accident which the city paid for, was driving with a suspended license, and with no insurance. In addition, he drove over a year without insurance--which is a requirement in order to get your car registered. Oh yes, we have our action outside of the entertainment industry scandals. Some people feel that this sort of personal life reflects on the political life, while others just want to see them do a good job for the people, with their work actions speaking the loudest. At any rate, it never stops, it just changes names and degrees.

Time will tell whether we the small people can ride the coat tails of some good investment decisions that result in profits for whatever goal we have, be it retirement, college funds for our kids, extra spending money--whatever. That is what we at SplitMaster wish for all of our readers.

PS---Today is 7/7/7 and is looked on by many to be the luckiest day in years. In fact, Las Vegas is going to do a huge business today in weddings, just because of that. We hope that the good luck rubs off on all of you, too. We can all use a dose of that.

 Today's Thought---
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It's been said that the only constant is change. I don't agree with that. There's another constant, and
that's the desire for change.......Dr. Robert Maurer, Psychologist..................Amen to that (Mike)


Mike

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