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Author: Mike Celeste Editor: Tony Ponzo April Circulation: 7523

Stat Sheet Week Ending April 24th 2010

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+185.0+1.7%+776.0+7.4%
S&P+24.0+2.0%+102.0+9.1%
NAS+109.0+4.4%+321.0+14.0%

Highlight of this past week: Two more earnings plays have nice wins this week. That makes four wins in a row and it is beginning to look more like last year's winning trend. Momentum Plays Plus, the current stock split pick on the Basic Strategy (SLGN) is over $3 ahead.

In this Issue---
Options---
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Let's work a little harder on our buying and selling of options. Sometimes the bid/ask on a stock has a tight range and sometimes it has a wide range. Let's get to the point where we want to buy the option--that has been decided. If we look at the bid/ask we see that it has a 5 cent spread, something like 1.60 bid and 1.65 ask. If that is the case, we like to go with the ask price; in this case, 1.65. The spread between the two is too close to quibble about. On the other hand, if the spread were wider, like 1.65 bid, 1.85 ask, now we would put in a limited price order, probably around 1.75. Remember, this is if we have decided that we would like to buy the option. If selling, the same reasoning would occur only on the opposite end. In other words when selling you look closer to the bid.

Momentum Plays---
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We had two more nice earnings play wins this week and are now sitting on four wins in a row. Momentum Plays Even though we are saying these plays are in an unofficial mode, a good deal of non-auto trading members are trading the plays with success. We are posting a lot of information about each play. In fact the only thing we are not doing is posting the exact price to go in on and that is why auto-traders are still not trading these plays. But we prepare members for what to expect and we post, right after the open, which plays we are about to enter and which plays we are passing on for whatever reasons. That seems to be plenty of information for many members who are adapting to this mode. But some are having a little difficulty as it does appear that even though the patterns of our earnings plays are much more in-line with the normal patterns than they were last quarter, there are some differences.

The main change seems to be that the retractions we always discuss, are coming sooner than before and in some case are not as significant. The entry points have been within the first 3 minutes after the open where it used to be at about six to fifteen minutes after the open. So members have to be prepared to move quicker and watch closely. For example, on one down or Put earnings play (GILD), it opened at 41.98. It then retracted up .52 to 42.50 within a two minute period. It then turned back down strongly which said to us to go in. We did and had a very nice win.

We want to do more testing this week to see if that pattern holds before we figure out how to bring auto-traders back in but we hope this bit of information helps for those member who are trading. We'll keep giving as much info as we can but use your judgment. We assume that those that are trading have been trading with us for awhile and understand the play so if things do not look right, consider passing on the play.

Three Indicators---
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We are still seeing a very strong up market, so we are going with the flow and not making any down plays in this strategy. Friday was a good example. Both the W Indicator and the Nas 3 Indicator were pointing to a down market , but because of the incredible strength of the market to the upside, we passed on the play. That decision again saved us some considerable amount, as the Put play would have been a loser.

The Economy, The Markets & Commentary---
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The market refuses to back down without coming up again. At this time we see no change in the momentum of this pendulum swing--it is going only in one direction--up. While the Nas was down a "huge" 1 point on Monday, the Dow was up every day this week followed by 4 straight up days to close out the week at over 11,200.

It appears that the economic reports and earnings reports are coming in with favorable net results, not including government intervention applications that may be running out soon. This positive showing seems to be adding fuel to the fire, with the markets responding continually to the upside. We did see the Dow fighting the resistance points set last week, with the closing high of 11,145. However, on Friday, we saw that resistance breached and a new closing high occurred on Friday

While employment was nothing to get too excited about, the report was favorable. Earnings were favorable. Home sales were favorable. Home prices were favorable. You had to be careful on the earnings reports, tho, as some companies reported good earnings, but the stock was hit with sell orders----selling on good news. You never know how it is going to go until the market opens and we see how it is leaning. In fact, some stocks were up in the pre-market right up until about 2 minutes before the open, and then they took off to the downside. These were some that had good earnings, but for whatever reasons, sold off on the good news. Probably it was because the sellers had bought at lower prices anticipating a good report, so they wanted to take some profits off the table once the report came out.

Last week we said this was going to be a very interesting week---and it was. Goldman Sachs was hit with fraud charges on that Friday, and the stock plunged. We didn't know what was going to happen in the following days. The questionable call on that was the fact that the fraud charge was released while the market was open---very unusual. It gave President Obama some ammunition when he went to Wall St. this week to address the financial markets, regarding reform. Goldman, itself, stayed in a pretty tight range for the week, going above and below last Friday's close and ended up losing just a couple of points for the week.

There seems to be more media play about Wall St. vs. Main St, and the hearings on TV are laughable---because the pay scales continue to skyrocket and bonuses continue to be paid, and all we see from our representatives is a lot of rhetoric and it is my belief that there will be little done to punish those responsible for the financial collapse thru mortgages, and most of those responsible have left the scene and taken their billions and ran for the hills. The others, including Wall St., mortgage lenders, government agencies, and government representatives all say that they didn't know. In all the years of history as related to loaning money, I never saw 100% loans made to people that didn't have to prove they could pay it back--never, that is, until these people saw how many billions could be made by doing such. The only thing possible that wasn't known was exactly when the bubble would break, That is because housing prices kept going up. We kept pointing out that it is mathematically impossible to continue to see huge house price increases, and little or no increases in pay levels. We do admit that we didn't know when it would burst, but we did know that it was wrong and said so. Now there will be a lot of blustering and very little will be done. That's the nature of the beast we have created with our government representatives. The majority of the people are against the obscene profits of Wall St., but we keep re-electing our representatives, hoping that the other representatives are defeated. About the only time there is a change is when some elected official retires, then there is a battle to secure that position. We let it happen, folks---.and it’s a sad story.

As the stories unfold, remember..........Stay tuned, these are interesting times.

Today's Thought---
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We'll be friends until we are old and senile.....Then we'll be new friends...........Dave Meleski

Mike

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