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Author: Mike Celeste Editor: Tony Ponzo July Circulation: 6782

Stat Sheet Week Ending July 19th 2008

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow+396.0+3.6%0.0-13.3%
S&P+22.0+1.8%-207.0-14.1%
NAS+44.0+2.0%-369.0-13.9%

Highlight of this past week: COF Earnings Play makes a very quick profit for us—just the way we like to see them go.

In this Issue---
SplitMaster Basic System---
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We were unfortunate this week in that the market in general had a good week, but our stocks were in the wrong category. They were in energy and commodities. That sector sold down with the drop in oil prices. Of course even though energy was hit this week, there is still demand out there so we believe our energy stocks still have upside potential so for now we are just holding on.

 Big Dipper System---
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There was additional weakness in our Big Dipper plays, but it isn’t sell date yet, so we are hopeful.

Options---
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The written (Covered) CALLs on ATW we had going expired on Friday, and they were all worthwhile, for they expired worthless, allowing our writers to keep all of the premium. We hope a lot of our members took advantage of the covered CALL play. We will be doing more of these plays.

 Momentum Plays---
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The earnings season is starting back in and we had our first play of the season this week with COF being a very nice winner in about 6 minutes. We have won every time we have played this stock over the last year or so. We'll definitely keep this one on the list of stocks to play each quarter. We had another potential play but it had a confusing announcement and consequently had little movement in it so we passed on the play. We'll see what this next week brings.

Concerning the W test, with the market being surprisingly to the up side starting on Tuesday, many stocks went to the middle of the W range meaning no plays. If the market goes up again this week we should start getting high W plays which means we will have some down momentum plays. We'll see how the week stacks up and of course keep you informed. This is the week that if we have plays we think look strong, we will turn the test into some actual plays.

Chart Indicator---
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There were a number of opportunities this week to play the Indicators. They continue to be a very bright spot in our universe. It was hard to tell if this week was a turning point in the market or just a temporary bounce. We kept thinking that at any moment the market would turn back down so we didn't really take advantage of our indicators. This week should be interesting. Do we continue our rally or do we fall back? We'll see what the indicators tell us. Members, don't forget to go to the Big Dipper page and check out the indicator section at the top of the page each day.

The Economy---
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Oil had some major drops this past week, and there was even mention of the margin requirement in Bernanke’s meeting with Congress. They are still reluctant to change the margin requirement, but we can’t give up---keep sending them (government reps and media) reminders to raise that margin. You saw where the shorting rules were changed, and for only 19 stocks---they can do it if they want to, even on a temporary basis.

The markets had some nice major moves up during this past week, even in spite of the huge increase in inflation. Some earnings reports came in better than expected, so the players seemed to want to ignore the bad news and pushed the markets up. Please be wary about the up moves. A number of earnings were made to look better, even if lower than last year, and one of the main reasons is that the companies evidently have been able to successfully put in price increases. One of the major ways that they are doing this is by downsizing the volume of the product they are selling. Many, many items are being sold in smaller packages for the same price, which is the more quiet way to raise prices.

We think that many consumers haven’t decided yet which areas to cut back on. Spending habits change slowly, but they will come. We have to be especially worried about credit card living---where people are using those cards to keep up their standard of living. At some point the piper had to be paid, and that will not be a pleasant time for them when it happens.

Next week will be interesting to watch. The Dow and Nas were going in the opposite direction on Friday, so let’s see how they work things out---more strength or back to down markets. Either way we continue to see that SplitMaster can have strategies for either type of market.—especially for short term or day traders. Our paper trading has continued to do well, and we are anxious to make it official.

Today's Thought---
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In America you can go on the air and kid the politicians, and the politicians can go on the air and kid the people. --- Groucho Marx

Mike

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