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Author: Mike Celeste Editor: Tony Ponzo March Circulation: 6815

Stat Sheet Week Ending March 8th 2008

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow-373.0-3.0%-1.0-10.3%
S&P-38.0-2.9%-175.0-11.9%
NAS-59.0-2.6%-440.0-16.6%

Highlight of this past week - JOYG: as a Momentum play makes profit goal in 2 minutes.

In this Issue---
SplitMaster Basic System---
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We were in pretty decent shape going into Friday, but the additional press on the markets pushed our splitters into negative net territory, altho RBN continues to show a very nice net profit.

Options---
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We continue to write PUTS and they have worked out fine as a good source of income. DRYS, a recent Big Dipper winner, was written on Tuesday and bought back on Wednesday for a 33% profit. We decided to close out the position after just one day, as the stock made a big move up on Wednesday. By Friday, it could be re-written for an even higher price that the original trade, as the stock fell back on Thursday and Friday. This continues to be the bright spot, but we have to be careful to write the PUT at a strike price that is low enough to cover major drops, and to not be greedy. If you have a decent profit, take it.

Another feature to be aware of is the writing of CALLS. In a dropping market, this can be a way to protect your investment, too. We point these out to you so that you are aware that there are different ways to look at the markets.

 Momentum Plays---
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While the markets continue to be extremely wild we continue to be extremely cautious with the Momentum play. This resulted in only one play this week but, it was a good play - the kind we like to see. We were in and out of JOYG within about two minutes and hit our target profit price. This is what we are used to and what happens often to us in a regular market. But when the market swings up or down by 200 points or more then turns and goes 200 points the other way then back again, it makes it very difficult to time a play just right. Sooner or later, the market will settle in but the bad news is going to have to taper off a bit first. Or at least, the media is going to have reduce its focus on the negative. Right now, that is all the stock channel seems to be able to do - talk about and speculate on the worst. So we'll take it week by week and eventually, we'll find ourselves back into plenty of positive action in this strategy.

 The Economy, The Markets & Commentary---
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A couple of weeks ago, the market wanted to ignore any negative news and it wanted to go up. The emotions have certainly changed, with negativity controlling the actions of investors and the financial media as stated above. The media zeroes in on thought--sometimes it is too positive and sometimes it is too negative in the stories they report. It seems to us that there should be more balance in the financial news, even if it leans a majority way--at least give some points to the other side. We realize that the economy shows more and more signs of slipping, but there are positive points to be made out there. That would be in the companies that tend to benefit from the bad times in other companies, as we have stated from time to time. They are out there---and it could be that we will be seeing opportunities to make some great profits because the good companies are being taken down with the others. As a consumer, I continue to fume and froth at the mouth over gasoline prices. Even with a slight drawdown on the supply of oil, the most important thing is that there is plenty of oil in inventory and it is at about record highs. The speculators have seized control of the market and we consumers are paying ridiculously high prices for gasoline. Now gas use has declined--I repeat--gas use has declined. Not that this is a surprise to us drivers, but it is hard to justify the prices now being charged when you have record supplies of the product and the use is dropping. Gold, silver and other commodities have seen much higher prices and these are sectors that some smart investors have switched to. We leave the commodity markets to others, but we have held some silver positions, and have seen resulting profits. This is where diversification is so important--along with being able to make decisions to act in a diversifying manner.

It is also time for another repeat statement----It is good not to lose.---During times like this we should be defensive. Keeping more in cash and cutting down on the size of investments can be a rewarding strategy. The old saying, "Cash is king" is especially meant for times like this. The major indexes broke thru into new closing 52 week lows. It is very difficult to set support levels when this type of trading is happening. Resistance points have to be reset, and all of this takes time to establish. It looks like CNBC's Larry Kudlow and his statements do nothing to give him a whole lot of credibility. First of all, he is fighting the tape, or fighting momentum--and we know this is not a good thing to do. Secondly, he seems to be flat-out wrong about his statement regarding housing, credit, etc., etc. At some point, if he keeps this up, he is going to be correct, by blind luck and by the odds that say you will be right at some point. He, and many others by the way, don't do labels of "analyst" and "expert" any justice with "analysis" like this. There are times to be aggressive and there are times to be defensive. You readers know that we have pointed out the huge danger caused by the housing collapse. It is true that it is not a collapse in all areas of the country, but the net result is that the "average" home price has dropped considerably, and the bottom has not been reached--on average. The credit markets continue to be a story that is suspect in its completeness. No, being defensive and following defensive strategies can be profitable and also lets you sleep at night.

 Today's Thought---
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Among the priceless gifts you can give for free--
The Gift of Solitude:
Be sensitive to the times when others want nothing more than to be left alone.


Mike

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