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Author: Mike Celeste Editor: Tony Ponzo December Circulation:

Stat Sheet Week Ending December 1st 2008

ChangesWeeklyNovemberYear to Date
IndexesPointsPercentPointsPercentPointsPercent
Dow+783.0+9.7%-1,279.0-13.7%-4,436.0-33.4%
S&P+96.0+12.0%-169.0-17.4%-572.0-39.0%
NAS+152.0+11.0%-337.0-19.6%-1,116.0-42.1%

Highlight of this past week: Indicator Strategy has a perfect record in November with all wins and no losses.

In this Issue---
SplitMaster Basic System---
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Team members should pay close attention to Alerts as there is a Basic play that might be sold Monday, or soon after.

 Three Indicators---
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We did not have any Indicator plays this past week, but our Support/Resistance plays did very well. I will try to add some recent plays in that category to the Past Indicators page, under the regular Indicator plays. Therefore, please check occasionally to see when they are posted. I'm going to try to do it this weekend. This is more time intensive as the entry and exit points depend on those support/resistance levels, and they don't let you know very much in advance---but it has been working very well.

The Economy, The Markets & Commentary---
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How about that ! We have had the Dow and S+P up 5 straight days and the Nas has been up 4 of the 5 days, with only a small loss in between. All this happened in the face of negative news. Is it just a bear market rally or have we seen bottoms for awhile? Our estimate is to be very careful in getting overly optimistic. The last time Nas had an up run was 10/28/08 to 11/4/08, for 6 straight days, also in the face of negative economic news. The next day (after the election) the Nas dropped 98 points and the Dow dropped 486 points. Team member Jonathon gave me an Investor Almanac and there was a section in there for the Thanksgiving period. It gave a large percentage play to the upside for the period Wed. thru Monday.

We have definitely had a great move up, starting even before Wed., and we closed around the highs on Friday. There might not be another full day of up moves, but if the market opens higher on Monday for a while, that would be great. Our W Indicator has come pretty close to being a signal for a down move, so that also makes us cautious.

We are starting to follow another trail in this investing program. Because of the overall situation, we think the Dec. SPY Puts closed at a price that will be lower on Monday. For example, we sold the Dec. 80 Puts to open, for $1.76 just about at the close on Friday. Our goal is to see if the market for them opens lower than that on Monday. Our thinking is to see if there is a price range that will allow for a profit even if the market opens lower---how much lower will be the key. If the market opens higher, then the puts should be even lower. When selling Puts to open you want to buy them back at a cheaper price to make your profit. So if you sold them to open for $1.76 and they started trading at $1.40 or so on Monday, you could buy them back to close creating a .36 profit. Of course the lower the Put trades the better and visa versa. Also, the time premium actually dwindles each day over the weekend. So theoretically, if the market opened up at even on Monday, the time value should have reduced the price of the option to give a profit. If it opens higher, even better. If it opens lower it goes against you so then it becomes a matter of how much lower it opens. This strategy would be for a very quick trade---so take a look at that Put on Monday and see how it works out.

In addition to the holiday spirit being positive, we noticed that President elect Obama , our first bi-racial President, spoke on TV a couple of times this past week. The market certainly wasn't disappointed with what he said, as we have had this nice rally continue. It appears that many people want him to get his programs going quickly, as he seems determined to give a stimulus to this economy. The markets seem very receptive to hearing what he has planned, even tho he won't take office until Jan. 20, 2009. Who knows, maybe he should come on TV every day, if that is what happens when he does. We still must keep in mind that even he says it will take time to get us turned around.

Point of information--
Gas in our neck of the woods here in Southern California, at Sam's Club, was $1.84/gal. on Wed. before Thanksgiving---another reason to be thankful for this great pullback, and we continue to give congratulations to all of you out there that joined us in contacting the media and government reps. We started that at the top for oil prices and they have come down to about 1/3 the price they were---$147/barrel to around $50/barrel. The people spoke--and we aren't done speaking if we move on to another sore spot that rubs us wrong. Stay tuned.

 Today's Thought---
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Try to make sure you give thanks for what you do have, and not dwell on what you do not have--especially this Thanksgiving weekend...........mc


Mike

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