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Author: Mike Celeste Editor: Tony Ponzo April Circulation: 6921

Stat Sheet Week Ending April 25th 2009

ChangesWeeklyYear to Date
Indexes Points Percent PointsPercent
Dow-55.0+0.7%-701.0-8.0%
S&P-6.0-0.7%-39.0-4.3%
NAS+19.0+1.1%+114.0+7.2%

Highlight of this past week: The Indicator Strategy holds steady at its 93% win rate for 2009 and the Momentum Strategy continues to move forward and now boasts over a 258% profit margin for the year!

Special Welcome: We'd like to Welcome all of our new team members. These are exciting times for our company and wish all members a profitable experience.

Special Offer:The price of our Indicator Strategy has just been raised to $49.95. This price increase does NOT effect people who are already members. Members already signed maintain their current price. However, for all newsletter members who are interested in this highly successful strategy, you can still become a member for 39.95 a month. Simply, click on the email link, staff@splitmaster.com and send us an email stating that you would like to become a Level I member according to the April 25th newsletter special. Give us your name and email address and we will contact you to set you up for the low price of 39.95 a month. Plus, the 30 day money back guarantee will apply. So if you are interested in checking it out, you have nothing to lose.

In this Issue---
Options---
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We have been doing some Beta testing on 2 different new strategies, one for applying to options on stocks and another for the Spy options. The results thus far are encouraging, but we need more testing.
In the meantime, covered Calls have been doing well on 2 of our favorites, CTSH and IBM. In fact, we bought back the IBM Calls that were written at 1.10 and got them off at 30 cents, for a nice 80 cent profit in a matter of days. CTSH is about 1/2 the price at the time they were written. This continues to be a nice source of income.

Another stock DRYS, has been finally moving up after a long and severe drop during the economic crisis. Lately DRYS, which is a dry bulk shipper, has been reporting better news about their condition and in fact the whole industry seems to be improving. We would not say they are out of the woods yet but, the May 5 Put seems to be a good written play. The stock has moved off of the low on abut the 13th of April to about 6.80 currently and with only three weeks left to expiration, we sold the 5 Put for .30.

We are not suggesting anyone make these plays. We are simply going over these strategies for educational purposes and telling you what we at SplitMaster.com are doing. Any action that readers take is at their own discretion and as always, we advise that no one enters into these kinds of option plays without fully understanding the risks involved.

 Momentum Plays---
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We only had four plays this week so it was a little slow. But there were 3 wins and one loss and the profits far outweighed the loss bringing our profit margin from about 235% last week to over 258% this week. So we continue to be very pleased with this strategy. Past Results

The only disappointment we are having in this strategy is with the SPY support and resistance plays (SR Plays). They have not been working out like we have been used to. We are not losing a lot on these plays because we are simply not playing many of them. But, we keep working with the criteria to see if we can adjust to the changing market and we have had some good results. There is more work to done on that but we'll keep you posted. In the mean time, there are some days that still have the type of market swings we are used to and when those days come we will certainly enter an SR play when we see opportunity. Learn more

Indicators---
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We continue to run over a 90% win rate for this strategy, even tho we had our first loss for April this week. It was a stop loss, which when added to our big win earlier in the week, left us with a net gain for the two plays. Note that we have another Indicator play scheduled for Monday, so be ready for more action. More on the loss---We sent a warning about the play, as there was news coming from Washington, and we felt it could be a negative factor in the play. We were looking for a down move on Friday, but the news was more on the positive side. Unfortunately, we didn't cancel the play, as the news didn't seem that good---but it was, and the market went up against us. It was out of the norm, so we continue to watch those times closely. Learn more

Feedback---
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Hello Everyone at SplitMaster. I am a new member for the Indicator strategy and have been paper trading for about two weeks. I have to say I am very impressed and look forward to start trading for real this coming week. I can see you guys put a lot of work and thought into your strategies and I congratulate you on a job well done. Jared P

 The Economy, The Markets & Commentary---
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Trying to figure out what the markets are going to do has been a real tough job, even for the very seasoned pros. When you haven't had much history to go by, it is difficult to estimate what is to come. All over the financial news, everyone is talking about how they cannot make any strong predictions---oh, they make them, for that is their job, but they admit there are many alternative actions that could change the direction of the markets in a heartbeat. The government stepping into the private sector and setting rules and guidance is on a very large scale. It is not just Wall St. CEO's that are calling the shots anymore, it is the government and the Street that are making things happen. In addition, the pace is very rapid, so you see hardly a day go by where there isn't some hearing, ruling or interview that hits the market and makes things happen.

We are going to throw our two cents worth into the mix. Our reading of the news is that the government does not want real bad news to be put out. We think that the stress test results are going to be on the positive side. Yes, there will be some banks that will either be taken over or closed, but the major banks are going to come out of this OK, and the government will see that they do. The problem we have is believing what we are told. Ken Lewis, the CEO of Bank of America, is saying that he was told not to bring up bad things about the merger with Merrill Lynch. Then there is talk that Bernanke didn't want bad news to be released. Apparently this happened before the election, but it could well have continued into the present administration. The preponderance of the statements we hear are driving the markets up. The sentiment in the investing public is that things are going to get better. When the sentiment is as strong as it is, negative news is almost ignored, and the markets move up. We have doubts that the economy will recover fully any time soon. Just the news that it isn't getting worse, and that maybe things have reached bottom is stirring this positive sentiment. Again, don't fight the "tape", or Momentum, or the swinging direction of the pendulum. On the other hand, don't believe all you hear. All politicians are suspect has long been my opinion, and I haven't seen anything that changes my feeling. For instance, how can the banks go from near total collapse, needing hundreds of billions to stay afloat, and the very next quarter show billions in profits? It just doesn't make much sense. OK, they are borrowing money from the Fed at practically zero interest and loaning it out to certain customers (not nearly all that need it, according to some companies that can't get a loan) and the spread between what money costs them and what they are loaning at is the largest in recollection. That is a mighty tool to drive profits, no question. However, how long can that continue? Then, the big question to me---What happened to all the toxic assets? They total in the trillions, we are told. The answer right now, is a relaxing of the accounting rules---good old mark-to-market. The rule was that you had to value the asset at current market value--and they had no idea what that value was. They still don't, but the rules were changed, very conveniently for them, don't you think?

There are also lots of foreclosures facing us, and that will speed up when the government assistance program winds down. There are many, many homeowners that will not be able to qualify. Our newspaper out here in California is still loaded for Notices of Sale, in preparation for foreclosures. Maybe we can be strung out long enough for this thing to work its way to and off the bottom and actually start showing profits instead of smaller losses. My guess is the same as said before---it will take years to get back to the point we were. We have to hit bottom, work along the bottom to make sure the economy doesn't get worse, and then slowly work our way back up. That's why the forecast is for years for this to happen. The ride back up to where we were will seem like we are going gangbusters once it starts happening. But we have to remember what happened when things started to move up too fast. We crashed! So the next time housing takes off, hopefully everyone will be more cautious and not go overboard with unreasonably easy to obtain loans. Right now we are hoping that the bottom has been reached, that we can work along the bottom, and then start a good steady return. While this time stretches out, we again say that we think the government will want to release a lot more positive economical news than negative news.

By the way, did you notice? The Dow was down 290 points on Monday and almost made it all up by the end of the week. That ended the Dow win streak at six weeks, just one week shy of the record going back to 2007. WAIT A MINUTE !! The Nasdaq did not go down this week. It had another winning week--making it 7 straight weeks of being higher than the week before. AND--it remains the major index that is positive for the year; up 7.2%, while the Dow, with all these weeks of being up, is still down 8% for the year. We read it as a very good sign that Nas, with all its technical stocks, is leading the way.

Stay tuned....................It has been........and will be...............exciting.


 Today's Thought---
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Things will get better--despite our efforts to improve them...............Will Rogers

Mike

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