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Author: Mike Celeste Editor: Tony Ponzo October Circulation: 13247

STAT SHEET WEEK ENDING Oct. 15, 2005


*****************************Percent / Points
Dow Weekly Change ______ 0. % -(5)
S&P Weekly Change ____ - 0.8% -(9)
Nas Weekly Change ____ - 1.2 % -(26)
*********************

Highlight of this past week
SRZ closes out with a great gain of 53% in the call options and 76% in the puts. The stock made an annualilzed profit of 80%.

In this Issue---
SplitMaster Basic System---
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SRZ closed out this past week and is the Highlight of the Week (see top). There are still 5 other splitters waiting for Sell Date. At this point we have 3 up, 1 unchanged, and 1 down. October has been good to us at SplitMaster, but bad for most of the rest of the market indicators--so far. Watch BOOM and CHRW as they are closing out this coming week, on different days.

Big Dipper System---
************************
There was a new entry to the Big Dipper and while it went below the buy price for a short time, it climbed back up on Friday and is showing a small profit at this point. This stock has good value points, so we feel good about the prospects.

Options---
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SRZ was our lone option to close out this week, but like RMD the week before, it had great results. It is our highlight play of the week, with the call gaining 53% and the written put showing a profit of 76%. These are nice and steady, at the rate of 1 per week closing out, but those percentage gains are nothing to ignore or consider boring.

Chart Indicator---
*******************
The Indicator flirted with neutral going into the beginning of the week, but the question quickly became--Is the Nas going to hold 2100? It tried, but it finally broke down and twice hit 2069 on Thurs. and Friday, before settling a bit higher at 2090. This means that we will most likely start concentrating more on the Big Dipper than the Basic Strategy now, but we'll talk more on that as we see what happens in the market this week.


S+P 500 Options---
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We almost puled the trigger on writing the puts in this system, which is a system we have never lost in, but the negativity of the market held us back. We still don't see a bottom indicated because we don't see a support level having been reached. I wish we did. Our alternative program that we are testing is still holding, based on a put being purchased when the SP 500 was at 1237. Another week has gone by and the SP dropped another 9 points--and it was up 10 points on Friday, so it was unable to recover even tho it had a strong Friday. The thing we did not like about Friday's up move was that it was done on very low volume on the Dow and Nasdaq Composite stocks. That doesn't make me feel that there is a whole lot of enthusiasm out there.

The Quest---
*************
We're getting closer to adding an investment option. We like November as a goal for a time frame.

Chart Indicator---
*******************
The Indicator remained negative, being about 37 Nasdaq points below the Pos/Neg neutral line.

Stock Split Comments---
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There is at least one more split coming up for Buy Date in October. This time frame remains slow for split announcements, too, and I think the market direction plays quite a big part in that happening.

New Option Testing---
*************************
Our Beta testing took a step backward this week, as criteria seems to have changed. It seems that the options have wandered too far away from true value, so that when the stock involved makes a movement, the options has too catch up to true value, as the option, both calls and puts, were overpriced. It was discouraging to see, but better that we learn these factors now than when we are doing actual trades. The puzzling point is that this was not happening a few weeks ago. We will continue to track this to see if it is a short term happening and if the program gets back to what it was producing.

Tip of the Week---
*******************

Historically the Nasdaq makes 10 times more from Nov. to April than from April thru October,
based on studies reported on CNBC. We hope they are right this year, as a lot of people are looking for things to start picking up in November.

The Economy---
*****************
The economic news this past week was definitely negative, but there could be a ray of sunshine for the future. The latest reports were the ones that factored in the hurricane damage and how it affected the rest of the country. Per the AP report---"Consumer prices surged in September by the largest amount in more than 25 years as Hurricanes Katrina and Rita sent energy prices soaring at the fastest pace on record.
The Labor Department reported Friday that inflation jumped 1.2 percent last month. It said that 90 percent of that increase came from a record-setting 12 percent surge in energy prices which reflected gasoline prices that briefly topped $3 per gallon last month after widespread shutdowns of refineries and oil and natural gas platforms along the Gulf Coast.

Meanwhile, the Federal Reserve reported that the devastating hurricanes sent output at the nation's factories, mines and utilities plunging by 1.3 percent in September, the biggest one-month drop in more than 23 years.

The decline in industrial output was led by a 9.1 percent drop in output in the mining sector, a category that includes oil and natural gas. Output at U.S. factories fell by 0.5 percent and utility output was down 0.9 percent.

Economists and officials at the Federal Reserve are worried that the energy jolt from the Gulf Coast hurricanes could start causing more widespread inflation problems.

In other economic news, the Commerce Department reported that retail sales managed to post a small increase of 0.2 percent in September. However, that tiny gain came after a huge 1.9 percent plunge in retail sales in August.

The concern is that the surge in energy prices will cause consumers to cut back their spending in other areas, a development that would make the economic hit from Katrina and Rita much more severe.

There was disturbing news in that area Friday as a preliminary reading of consumer sentiment from the University of Michigan showed a drop in its index to 75.4 in mid-October, a 13-year low, from 76.9 in September as Americans remained gloomy about high energy prices.

The retail sales report showed that sales at gas stations were up 4 percent last month. However, much of that increase reflected the surge in pump prices rather than increased volume.

The 1.2 percent rise in consumer prices was far worse than analysts had expected. They had been looking for a gain of around 0.9 percent. However, core inflation was better behaved at 0.1 percent. Analysts had expected a rise of 0.2 percent in this area, which is being closely watched by policy-makers at the Fed for signs that the surge in energy costs is beginning to show up in higher prices in other areas.

The report on consumer prices showed that energy prices shot up by 12 percent, led by a 17.9 percent surge in gasoline prices. Natural gas prices rose by 12.1 percent rise and home heating oil prices jumped 12.7 percent. The government this week warned homeowners to expect heating bills to soar this winter."

Most reports I heard felt that the past month results were a spike that won't be repeated, or extended---however, the longer term effects are yet to be determined. It's hard to imagine that we won't see more price increases in a ripple effect from the energy price increases. Those "experts" that said the higher energy prices hadn't dampened demand were challenged by us a long time ago, and I think we have been vindicated. Demand for gasoline has continued to fall based on the weekly reports. You can't raise the prices in one sector to those levels without causing major problems in other sectors. There is only just so much money to go around, into and out of the American consumers' pockets. If we could get a break with a reduction from these lofty levels of energy costs, it might help to make up for the ripple increases in the other sectors---or at least help a bit. Stay tuned.


Today's Thought---
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The hardest thing to learn in life is which bridge to cross and which to burn.....

Mike

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