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Author: Mike Celeste Editor: Tony Ponzo April Circulation: 6805

Stat Sheet Week Ending April 5th 2008

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+393.0+3.2%-656.0-4.9%
S&P+55.0+4.0%-98.0-6.7%
NAS+110.0+4.9%-281.0-10.6%

Highlight of this past week: CMI moves up nicely on our Big Dipper list - over 10%
in 4 days.

In this Issue---
SplitMaster Basic System---
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Monday was the end of the quarter, and again our splitters outdid the major indexes. We have had profits for each of the 3 months, while the indexes are still in negative territory. Our one Basic play that is a negative is coming back and we feel we are on the right track. We reiterate that we feel the market bottom has been hit. Again, that is not to say we are out of the woods, but because of that Fed action it would appear that the worst has been seen. One thing we would like to see improve is the number of stocks that announce splits. We have not had a new one in over 2 weeks and we think that this will change soon with the better market climate.

 Big Dipper System---
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Our decision to list CMI for a second time on our Big Dipper list has turned out very well--so far. It was a good winner the first time and so far it is up over 10% in just 4 days. We do have one regret and that is that our other consideration for a 2nd run on the BD list, FWLT, was not listed with a higher target buy price. It had already fallen a great deal and we weren't too keen on its present position, so we were very conservative in the target buy price. The stock has gone from 56.62 to 63.15, also in just 4 days. At least we hit on CMI, so we are thankful for that.

 Options---
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With stocks still being volatile, the options continue to carry pretty hefty time premiums, which are difficult to overcome when buying them. Therefore, our strategy of writing options continues to pay off. We also have started testing stock options for quick trades. We look for stocks that seem to have gotten carried away too far, either to the upside or the downside. We did actual trades on 4 stocks and are happy to report that all 4 were winners. Granted, the profits were small, but in day trading, that is OK--not being greedy works better than going for the home-run in the same day. These stocks were played after the huge up day on Tuesday, calculating that they had gone too far up. The funny thing is that we bought some puts and made the profit and then watched the stocks come back and go higher. The strong point we make about day trading is that you have to be nimble, with several changes in prices and some cancellations as the markets move up and down during the day.

Right now there seem to be even more potential plays for puts, as the Nas is a bit overbought and has a W Indicator over 90, which is bearish for a day trade. CALLs are still good plays, on particular stocks at particular times. Our trigger finger gets itchy--pull or not? Let's see.

 Momentum Plays---
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We are in our in-between earnings for the quarter so there are no plays to discuss this week. Although stocks will start announcing this coming week and it is possible we could have a play, we do not expect the active movers to start in until the latter part of the next week. We'll keep members posted.

 Index System---
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A while ago one of our team members suggested Index options other than the SPX. We have long had trouble with the Market Makers in the SPX, as they have made it difficult to get orders executed at decent prices. Well, we finally took a closer look at the SPY and DIA options: one based on the S+P 500 and other based on the Dow. It was very interesting, as the spread between bid and ask is very small, so it is easy to get in. The Dow or SPX has to move in the direction we want, but we have been more correct than not on picking the entry point. On Thursday and Friday I did a real time play test on the SPX and the DIA. While I made a profit on each, it seemed more comfortable when in the DIA. That ease of getting in and out made for less stress. We are going to continue to track these, along with the SPY. Again, though, a trader has to be pretty nimble (at least I try to be) with changes to the price as you watch the market moves. We will keep you posted.

 The Economy, The Markets & Commentary---
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There was an emotion that hit me this week that I haven't had before--at least to this extent. That emotion was sadness. I am wondering what the powers-that-be are doing to the middle-class guy???? I'm old enough to remember back when it took just one wage earner to support a family. My mother worked off and on (shoe factory and our restaurant, when needed to fill in), and yet she provided us with everything--love, great advice,cooking (and was she a good cook--learning recipes from all the other immigrants she worked with in the factory) , cleaning, etc. My wife was a housewife, and we budgeted and had children and got along. That can't happen these days, and it hasn't been available for a long time. It's hard to imagine that I would come home from work at IBM and supper would be on the table (the benefit of a set schedule)--hot and ready to eat. It amazes me yet, to think that's the way it was. Anyway, we have gone to having a society where every adult needs to work to bring home enough to support a decent standard of living. The saddest part of my thoughts is that in the last few years we have seen many small pleasures taken away from us. Coming from NY State (Endicott, NY--original home of IBM) and now living in California, we eagerly looked forward to getting airline tickets (far in advance, as they were the cheapest) and going "home" to see all the friends and relatives. Flying was a real joy.
Now, the thought of going thru all the hassle at the airport (shoes off, detection machines, no visitors in incoming our outgoing areas) and squeezing in small seats, with no meals, etc,--all that really turns us off. On top of that, saving our frequent flier miles has turned out to be useless, as the ones we have/had (US Air) required us to go thru them for tickets. We tried to get a ticket, just one (to test) and couldn't get that one ticket for any day in the whole 31 day month, and that was checking from 6 different airports on each end of the trip. We had 9 of us to arrange for, and so we didn't go that year. One year we had to buy additional tickets when we couldn't use the frequent mile tickets. The last time we couldn't justify buying them as the prices were way too high. Now this year comes along--Airlines are cutting back on flights (they were all full when we went last time--what's going on?) and they have raised fees double digit times in less than 6 months. On top of that they have added fees that were not there before. $100 for a 2nd piece of luggage, and on and on. Try making plans with all these factors facing you. No, it is sad that something that was eagerly looked forward to now is a dread. Then, there is the gas situation. Before, if you needed something from the store, or just wanted to go to the mall and stroll, you jumped in the car and went, with no other thought. Now, using the car becomes a luxury when it isn't used to get to work (and that is a necessity, no doubt about it, of course). We have to plan for several stops in one trip so we don't use too much gas--and what is the price when we have to stop to buy gas? Who knows, it changes almost daily--and quickest when it is going up. Now, we finally get to the market and what happens? We have to be careful about what we buy, far more so now than in the past. We used to be able to splurge a little bit on comfort food, etc. Now, we look at the ads a lot closer, get what's on sale, and especially hope that we have coupons besides (double at one of our stores). The budget has to be stretched out---food prices, along with energy costs are killing the middle class--by strangulation. It certainly isn't a pretty site--and we wonder how our kids are ever going to be able to afford a house--at least without parental help. The grandkids will have it even worse.

There was a report out this past week about the continuing stretch between the rich and poor. Well, you can include the middle class in there, too. The rich are getting richer, is how it goes. It used to be that there was no middle class in 3rd world countries, just the rich and poor. Now the US is slowly declining into that scenario. No, we aren't there yet, but the move is in that direction. The rich got richer on high electric rate scams here in CA, and they were found out. Did the consumer get refunds--no way. Did the electric company get relief--you bet they did. High oil prices enriched the big boys there, and they continue in that vein--and we average Joes (and Josephines) pay for them to have all that. Mortgage scams sucked billions into the big boys' hands--and what is happening to them. CEO's resign and get golden parachutes besides, and their investors are left with pennies on the dollar---and the innocent buyers of houses were tricked into plans they couldn't afford, and foreclosures are at a record rate. You can just imagine the despair there is when you get foreclosed on--and now the unemployment is jumping--so you lose your house and your job. Outsourcing hasn't helped, either--good jobs going overseas--and it's probably hard to even get a job at Wal-Mart in the service area these days. Now, I'm not suggesting that all the top wealthy people are this way. To be sure there are plenty of top executives who are decent people with integrity.

All these things however, have contributed to a stress level that is sad to watch develop---and I haven't even mentioned the freedoms and ease of going thru every day life that has been lost in this new century. That also points out the value of history. You have to know about the past in order to see where you are in the present. We all have dreams and hopes--and we hope that we can reverse the trend somewhat, at least--and get back to a more tranquil life style.

Today's Thought---
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Treat everyone you meet as though they are the most important person you'll meet that day......Roger Dawson, author, speaker



Mike

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