SplitMaster.com:: Newsletter
Home :: Strategies :: Membership :: Past Results
Author: Mike Celeste Editor: Tony Ponzo August Circulation: 7232

Stat Sheet Week Ending August 4th 2007

ChangesWeeklyJulyYear to Date
IndexesPointsPercentPointsPercentPointsPercent
Dow-87.0-0.7%-197.0-1.5%+715.0+5.7%
S&P-26.0-1.8%-48.0-3.2%+15.0+1.1%
NAS-51.0-2.0%-57.0-2.2%+96.0+4.0%

Highlight of this past week: Momentum Past Results win 14 of the last 15 times.

In this Issue--- SplitMaster Basic System---
*****************************
Good news, bad news---Let's start out with the bad news for SplitMaster. We had just one signal for an entry play and it has turned out to be a false signal at this point. We are holding it to see if there is another signal to act on, and we just might want to buy more at a lower price to average our cost--if we get the proper signal. The bad news hit us directly in the pocketbook. The good news is, we have been doing very well on the Momentum plays which has built up our profits. The other good news is that our pocketbook did not get hit for any of the long list of current splitters that we are watching. Last week we told you which direction we were looking at for each splitter. FTI should have been on the list, also, as a late arrival, and looking to go down from last Friday's price. Because we didn't get the signals to get into the plays, we see that we saved a ton of money. That saying we quoted last week bears repeating---It's good not to lose.

In fact, if someone played the direction, they could have done very well--Ex. FFIV was 91.18 at the close last Friday and this Friday it closed at 83.68. A great short and/or PUT play. We will continue to monitor the existing splitters very closely.

 Options---
************
We continue to like the potential for the options, both in the Momentum play and when the signal is presented for a longer term play. We had 2 plays this past week in the Momentum system that could have made $2 each on the option we bought. On 10 contracts that would have been a profit of over $2,000 on each stock, or over $4,000 on both of them. Some of our team members do better than we do, as we try to be fairly conservative and consistent. We hope that some of the team were able to make those extreme profits on investments of around $2,500.

Another area we want to mention is the SPX options on the S+P 500. By using our posted signals we are able to target a CALL or PUT in the SPX. We had a buy signal last week Friday at the close and Monday the S+P 500 index rose 15 points. A CALL quite a ways away from the actual price made over $10 per contract. That means just 2 CALLs made over $2,000 on Monday. The CALLS were priced right around the $10 level. At the close on Tues. we had another buy signal and Wed. the SP went up 10 points. Friday, 8/3, we had another signal, so we will see how it goes on Monday.

 Momentum Plays - Another Winning Week - But----
*******************************************************
We only were able to execute four plays this week but some of the members were able to get in a few more and with much success. Out of the four plays posted, we only had one loss and it was a small loss at that. Plus, that loss was the first loss we have had in the last 15 plays.That gives us a 94% win rate since the beginning of July. Momentum Past Results We thought we were going to get through July with a 100% rate for the month but that last play for the month (FPL) just did not want to cooperate with us. Still, we are feeling pretty good about all those wins.

But ---- we got hit yesterday in a play on WY that has gone south on us. We held the play over the weekend and are looking for some up momentum in the stock on Monday. WY was hanging in there pretty good until a conference call with Bear Stearns took the entire market down with the DOW droping 289 points as you are probably well aware. Too bad we were not in a PUT play but at the time we went in, the momentum of the stock was up. We are not that far out though and this stock can move several dollars both ways in a day, so with any help from the market at all we could be back into a profit quickly. That is what we are counting on.

This brings up another point. With the market so volitile - in the positive side at one point then three minutes later in the negative and back and forth, we are thinking we should sit out of the market for the next couple of days or so to see if it goes back to some sort of stablility. We would still work on any plays we have going but it is much easier to judge these momentum plays when we can rely on the market staying in one direction for at least a half hour or so. We'll let the members know what we have decided later today.

Chart Indicator---
*******************
The CI had seen the Nas close under the CI break-even line for 9 straight days. We all know that the market has seen some very large swings during this time. We think the CI has been right on for us during this time, and either provided a profit-making opportunity or saved us quite a bit of our investment money by telling not to go in.

 The Economy & Commentary---
***********************************
There is no question that we are in very volatile times. Our indicators have been telling us this and the CBOE Volatility Indicator is saying the same thing. In looking at the VIX we see the volatility was 15.23 on 7/19 and in the next 2 weeks it went to 25.16 on Friday 8/03. That's an increase of 65% in 2 weeks. The higher the number the more volatility is indicated, so you can see what is happening. If you follow the market closely, you already know the markets have been up, down, sideways and then the pattern all over again--and again. It is a very difficult market to make money in if you are trading fairly short term. We saw the individual stocks do the same thing. They couldn't seem to make up their mind which way they wanted to go. Take a look at what happened to the Dow this past week. It closed with triple digits every day but Monday, and that was a change of 93 points. Taken on average, each day showed a Dow change of 155 points. Now that's volatility. CNBC is having a field day with the volatility, trying to figure out how an investor can play these markets. A pretty tough job--the Dow was up 3 days and down 2 days this past week, but the 2 down days totaled more than the 3 up days. Many moves in the market don't seem to have rhyme or reason to them. It seemed to us that on average the earnings reports continued to show results that beat the estimates. In the emotion of fear, however, it didn't make much difference. Each day the emotion took over and some small bit of news would trigger a rush up or a sudden dive down. The "experts" always seem to look backward and explain why the market went this way or that way. Hindsight is easy--it's the predictions that are hard. Distinctly looking foolish was the one "expert" that said earlier in the week that the sub-prime sector was not a factor anymore, it had run its course. The very next day the market was doing well when some news came in about sub-prime and the bottom fell out of the whole market--and that was blamed for the day's decline. You can't be an investor and be acting on the advice of people like this--even they can't make up their mind what is driving this market. That's also why we try to hold back in a market like this--holding back until the volatility goes down to more "normal" levels. We continue to feel this is the best approach, but it does make for interesting markets, to say the least. Keep tuned.

 Today's Thought---
********************
Needed this week---A way to maintain a healthy level of insanity---
At lunch time, sit in your parked car with sunglasses on and point a hair dryer at passing cars. See if they slow down.


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.