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Author: Mike Celeste Editor: Tony Ponzo October Circulation: 6765

Stat Sheet Week Ending October 18th 2008

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+401.0+4.7%-4,413.0-33.3%
S&P+42.0+4.7%-527.0-35.9%
NAS+61.0+3.7%-941.0-35.5%

Highlight of this past week: Momentum Play makes a nice $1.50 profit per share in less than 15 minutes.

In this Issue---
SplitMaster Basic System---
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There's not much new to report on the splitters. It is interesting to note, tho, that there has not been a new spit announced in a long time. That goes right along with our belief that we have stated over many years. Splits come from companies that are doing well and therefore there stock is going up. So, with no new splits announced, it probably means that not many companies are doing well enough to announce a split at this time.

 Big Dipper System---
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Even tho the dippers are based on lowered prices, we have had a devastating market that has taken them to lower lows. We did have a decent Friday, but there is still a long way to go.

 Momentum Plays---
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We haven't had many plays this month, again due to this devastating market, but the few that we have had have been nice wins. And this week produced $1.50 profit in a less than 15 minutes. That stock was WYNN which we have played before. The stock moved around fast and for those members who may have missed the $1.50 profit the first time were able to easily get it by waiting a little longer as the stock continued up after that.

Three Indicators---
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The way this market is going, the Indicators are not applicable, specifically. It seems we can still buy a put and a call on the SPY at the open and see profits both ways during the course of a day. When the dust settles down, and it will at some point, we will be making plays on the moves in one direction. We would like to note that by using support and resistance levels, even during the volatility, we have been able to make profits both up and down. The opportunities are still there. Be watchful.

 The Economy, The Markets & Commentary---
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We continue to have wild and wooly markets, and not even daily, but by the hour. Even without much news the markets will rapidly change directions. One "expert" said he believed the VIX, or Volatility Index, had reached its high. We reported last week that it hit a bit over 76 on the Friday before. This week, on Thursday, it went over 81, making a new high. So much for another "expert" opinion. The main goal during times like this is capital preservation. We will repeat again--it is good not to lose--or it is good not to lose any more. Those "experts" again have been advising everyone to hold on (while the big boys are dumping). Just take a look and see if you had sold at the beginning of October, let alone earlier. I'm sure that most stocks could be bought back today at lower prices, and low enough to make a substantial difference in portfolio totals. There's nothing wrong with that, even with a long term view. Warren Buffet has been buying, and stopping when the market moves up. He has a great quote that goes something like this--"Be fearful when the market is greedy and and be greedy when the market is fearful." Obviously he thinks it is a decent bottom, but I'm sure he has plenty of reserves to continue buying at lower prices.

The economy is in trouble and the bailout is far from being implemented, let alone tested to see if it is going to work. Again, the big boys are in the picture, running the bailout. The presidential election is coming up soon, and I really feel sorry for the winner. It doesn't seem to me that all these "changes" that each candidate talks about will be able to get our economy back up and running strong--for quite a while.

It is still our opinion that Congress should be cleared out entirely and new people given a chance. Given a chance to see if they are honest, truthful, and intelligent. Those 3 things are lacking in most politicians, evidenced by the quotes appearing on TV showing the leaders saying that the economy was in good shape and that mortgages didn't need more regulation. At this point we have seen the bailout go from $700 billion to over $800 billion, when the pork was added in to draw more votes of acceptance. Yes, wooden arrow makers and Puerto Rican rum makers needed to be included in the crisis--along with a whole host of other special interests.

We still don't know the details of this plan, specifically, and it seems no one else does, either. Mr. Paulson has taken care of his previous company and big time, at that. An engineer has been appointed to head the new office that is handling this. Engineers are terrific at building things, but it doesn't seem that building a financial system is taught at engineering schools.

Personally, I feel that we are being lied to, and the cost of this is going to go well over a trillion dollars--and maybe that trillion should have an "s" at the end of it. We have to blame ourselves for a good deal of this mess because it was too logical that the easy credit was going to come back to haunt us. You just can't do those things without there being a bubble bursting--and it was a big bubble with a very big burst. The whole world is in a mess this time, and we see that the politicians around the globe have been just as bad as ours. They allowed these derivatives to be purchased in their countries, too. "Greed" is a word, and it has a definition for a good reason---it applies to so many.

We were able to get pressure put on the right people in the right places when it came to the obscene prices they were charging us for oil, which resulted in screaming increases in prices of commodities and almost everything else. This past week oil quicly passed below our short term target price of $80/barrel and broke under $70/barrel at one point. We continue to believe there is more downward prices to come shortly. If there is a production cut by the Saudi's, it won't be mainly because of the price decline. It will be because of the demand decline and the elimination of most speculators in their game to drive prices up. We believe our efforts were successful and we congratulate all of you that took up your pens and emails and got the word out that we were not going to accept their explanation that speculators were not causing the price increases and saying that it was because of world demand. Boy, did world demand go down quickly. You can't have bad times in the wealthier countries without having it affect demand for products and services from China and India, for example.

Unfortunately we feel the financial problem is too big for us common folk to correct. I hate saying that because I know that it can be done. It just seems the people can't get enough organization going to make it happen. We need a real uprising. We know that the people that got us into this mess have been appointed to get us out of it. We can still have hope that it can be done. Hope is a strong word, and one that we like a lot---but we would like to have a better word that would give us the belief and faith that it will be done. If the problem makers didn't have enough intelligence and fortitude to prevent this fiasco, then it is only hope that can give us any expectation that they will change their ways now. The big boys that were heading big companies and the ones received golden parachutes (like the ATT&T CEO that was fired after 9 months on the job and received $30 million in severance) are waiting like vultures with boatloads of cash. They will be waiting for the extreme bargains that will be available down the road. It happened that way before and it will happen again--Please make sure someone throws it up to me if this turns out to be different this time. (And I definitely exclude Warren Buffet from that group--he is a straight shooter and always has been.) In our country we have lost the rule of thumb that says you reward people for doing a good job and you punish them for doing a bad job. Now we reward them either way--that is, if they are the leaders of companies and governments. We still seem to punish the average Joe (not the plumber? guy) for doing a bad job--rewarding them for good jobs seems a bit slower than it used to be, too.

Say your prayers, folks, We all need them. There were a couple of signs this week that some things are improving slightly. Let's hope we all get a nice surprise and all these programs really do take hold. We'll know soon enough.

 Today's Thought---
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Worry looks around-- Sorry looks back-- and Faith looks up.


Mike

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