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| Author: Mike Celeste | Editor: Tony Ponzo | July Circulation: 13012 |
STAT SHEET WEEK ENDING July 23/ 05
**************** Percent / Points
Dow Weekly Change + 0.1 % + 10
S&P Weekly Change + 0.5 % + 6
Nas Weekly Change + 1.1 % + 11
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Comments:
The markets continued to roll on upwards and it didn't seem like there was much in the news that could take them down. Even the terrorist bombings in London couldn't do it. Friday saw more of that in Egypt. It sure seems to give fuel to the belief that we need to protect our own shore over here in the US. I saw that NY City is starting to randomly inspect backpacks on the subway. So many innocent people being killed. It is very difficult to understand the logic of killing innocent people---and in the name of religion. I just can't fathom it, but religious wars have been going on for centuries, so it seems there is no end to them, in one form or the other.
Back to the markets. We saw Nas have a stretch of 7 straight up days, and ended the week with 10 up days out of the last 12. The Dow has been close behind with 9 up and 3 down. The S+P 500 continued to make recovery highs. Nas joined the S+P 500 in finally breaking above the closing prices of Dec. 31, 2004. Only the Dow hasn't been able to do it, but it's pretty much knocking at the door.
Earnings reports have been mixed among the big companies. On balance, tho, earnings have been very good. The one negative is that when companies have any implied negativity in any section of the financial statement, they seem to pay a very heavy price. ISSC, a recent splitter now closed out, is a prime example. Someone determined that the backlog wasn't as expected and the stock dropped over 20%. The company reports backlogs in a manner that is not readily apparent and it seems
the company is still doing very well. HTCH, a non-splitter, but one I watch, was hit hard on Friday, after reporting earnings that were way up in one aspect, and hit the expected numbers right on the money, but it wasn't good enough and the stock
dropped from a high of 39.80 on Thursday to a low of 31.39 on Friday.
We are continuing to watch ex-splitters closely to see if there is a system play if they drop to support levels. More on this at another time, after some more study.
CAT was an interesting situation---among several---in that we had it posted as a sell at the opening on Wed., with earnings coming out on Thurs., before the open. We sent an email alert pointing this out, for those adventuresome among us that might want to hold and see what happens after earnings. Jim Cramer, our CNBC favorite, had put the word out that CAT would have an excellent report and the stock had gone up before the earnings came out. We stated that we didn't know if the stock would be sold on good news or rise on good news, and we watched. Mixed results are what we saw. The
earnings came out, were good, and the stock opened higher than our sell price the day before. However, very quickly after the open, the stock started dropping and hit a low of a bit over 1 point below our sell point. Those that sold near the open would
have done better, but if you held into the day, the results were lower. The options were all over the place. I'm not sure that they went up that much at the open, if at all--I caught lower prices even when the stock was the same as our sell price--lower, that is, than the options were at the time of our sell. Anyway, CAT was a big winner for us, and we were happy not trying to squeeze a bit more out of the stock. This was a splitter that was
in both the Basic and Big Dipper systems, and made a profit in each one. The call options both made over 100% and the puts made their usual hi profits, too. Check the website www.SplitMaster.com, and click on Past Results for exact numbers.
Another very interesting situation developed on Friday. HANS was a play starting on Friday, but what a day it was! The stock opened normally, but soon after plunged from 98 to 84.56. It was moving very quickly and when we saw it, the stock had started to recover. We sent out an email alert stating we felt the stock was at a good price for a Big Dipper addition, and it was 88.80 at the time of the alert. There was a somewhat further recovery by the end of the day, but it was still down over 5 points. The only reason for the drastic drop that we could find was connected to the short interest. There are no options on this
stock, so we didn't have to be concerned about pricing calls/puts. To add to this story, the stock earlier in the week had a very large runup to a high of 108 on Wed. That was
the day that we would normally have entered the position, at the open of 106.80. However, because of the rapid rise in the stock--to new highs--and for no apparent reason other than a news article pointed out that the stock was up 1,000 per cent since 2004, we decided to delay the buy point. Too much, too fast, was the theory. That was a pretty good decision, as it turned out, because the stock started tumbling on Thurs., 7/21. If our team members didn't buy on the open, they were able to get in at prices in the 80's--and then our alert pointed out that we thought it was another good entry point. These stocks are wild and seem to overreact---greatly--in one direction or the other.
SUN is the other stock I wanted to point out this wild week. It is on our Basic List and has been all over the place. On Friday, tho, it made an upward surge to a new high for the year, rising 5.05. The options rose proportionately. We are especially interested in seeing if this is a break-out and maybe (MAYBE) another 5 points. I know some of you picked it up 4-5 points below our entry points, so you are looking extremely good at this point. We had an original Big Dipper price set and then lowered it when oil prices started dropping (SUN is an oil company). I see that those team members thought the original BD price was close enough to attract them. Congrats for your good work.
Member Contribution---We have been asked about a service related to pre-entering option orders. One of the team sent this in, and we are checking it out to see if we will enter the program--Here is what he had to say about optionsxpress.com---
"Thanks for all the great info. In exploring the optionsXpress website I noticed that they offer an "Auto-Execute" feature. They take the recommendations from companies such as yours and then enter orders in individual accounts. For example, ideally, I could tell them I subscribe to your Advisory Service and I want to trade a fixed Dollar or Percentage
Amount on each trade. They obtain a copy of your recommendations and enter an order in my account."
Reminder---Check the web site www.SplitMaster.com daily, members and non-subscribers. For members we try to post by late afternoon for the next day, but at least before the open of the next day. There is a 2 day advance notice on stocks and a 1 day preliminary posting on options. For non-members, you can see if we have closed any positions that day and take a look at the results--stocks and options.
Today's Thought---
The favorite saying my mother gave me--- My mother taught me about JUSTICE.
"One day you'll have kids, and I hope they turn out just like you.
Mike Celeste
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