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Author: Mike Celeste Editor: Tony Ponzo August Circulation: 6734

Stat Sheet Week Ending August 1st 2009

ChangesWeeklyJulyYear to Date
IndexesPointsPercentPointsPercentPointsPercent
Dow+79.0+0.9%+725.0+8.6%+396.0+4.5%
S&P+8.0+0.8%+69.0+7.5%+85.0+9.4%
NAS+13.0+0.7%+144.0+7.8%+402.0+25.5%

Highlight of this past week: The SplitMaster day trading stragegies have a good week of wins. The Indicator Strategy now sits on an 82% win rate year to date and the Momentum Strategy shows an amazing 318% profit for 2009.

In this Issue---
Big Dipper System---
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As we discussed last week, we were very close to a sell on one of our Big Dippers. The stock was ALXN and it did get sold and was a very nice profit, when bought at the lowered Big Dipper stock price. That is the benefit of buying the Big Dipper. If you also bought it in the Basic, it averages your cost down considerably. We still have it in our Basic system and the stock is higher than when we sold it this week, so it is moving in the right direction.

Options---
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Don't forget to use the CBOE option calculator, or one that is provided by your broker. It should show the theoretic value of an option when the stock is a certain price, compared to the strike price and how many days are left before expiration. Sometimes the price of options go one way or the other due to market conditions (such as institutions hedging using a large number of a particular option), and it is possible to take advantage of that by buying or selling based on the theoretic value. Also, watch the VIX or Volatility Index. As that goes up the market usually goes down. If it goes down the markets usually go up. Take a look at the chart of the VIX, daily, for example. Then compare it to the daily chart of the Dow and you will see what we mean. It is just another tool to help us--and we need all the help we can get.

Momentum Plays---
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We only had a couple of plays this week but we come up with a nice net profit between the plays. With more earnings plays coming we should be looking at more plays coming in the next few weeks. That should get us back into a nice stride for this strategy which we look forward to. The profit from this week puts the strategy right back up to a 318% profit for the year. Past Momentum

Indicators---
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The Indicator play had a record run of 12 straight days showing Indicator signals--and all pointed down. Fortunately we were able to cancel some plays based on our interpretation of the pre-market and the open. As it turned out we had 2 wins and 0 losses on the plays we were able to enter. That put us back on the winning track and ahead for the month, keeping our winning percent over 80%. The markets continue to be tricky, but they are showing us some new trends that have helped us when deciding to enter a play or not. Past Indicator

Feedback---
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We are getting feedback from some members that have been able to make increasing profits on our Day Trading Strategies. How are they doing it? The word from them is that they are combining our signals with signals that they use themselves. Henry, for example, reports that he uses Stochastics, along with our signals and has been getting good results. It also appears that some plays show entry and exit at shorter time spans. Great, and that makes us feel good, for we want everyone to be learning more and more about Day Trading techniques. Congrats to all of you that have been able to refine and tweak criteria into a system that works for your particular method of investing. Keep up the good work--and thanks for sharing with us.

The Economy, The Markets & Commentary---
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We sure don't lack for news coming out of Washington, do we? And it is nice that the President and a couple of his "friends" can sit down and have a beer together, like on Thursday. On the economic front, it isn't going so cordially. We expect that the health plan reform is going to take longer than expected and the news seems to show that the American public is not completely buying into the administration's explanations of what to expect. One of the problems is that it is early in the game, and both the House and Senate will make changes and on and on. The one thing that could speed up passage is the fact that the Democrats control Congress and might be able to rush something thru--like was done for the financial bail out, which turned out to be a lot different than what was proposed at the beginning. The speed of that was criticized here big time, as we didn't have enough details. That fact proved to be a valuable lesson when the money didn't do what was expected. The bonuses seemed to continue and we still don't know where the money went or is going. The LA Times reported on Friday the following--"Nine big banks that when combined paid out more than $32 billion in bonuses--even as the banks took in $175 billion in taxpayer aid to weather the storm, according to an analysis that provides one of the most comprehensive looks ever at Wall St. pay. Nearly 5,000 people received bonuses of $1 million or more amid the worst financial crisis since the Great Depression, according to the report by the New York attorney general's office, released Thursday. "When the banks did well, their employees were paid well,: the report said. "When the banks did poorly, their employees were paid well, And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well.: (End quote) Looks to me like another letter can be fired off to our government representatives. Hey, if you think it is all right, let them know you back these bonuses--but if you don't, let them know that, too.

For the health plan, you can see the proposal online. We say good luck in trying to figure out what they are saying. Every day the battles rage about what it really says and what will really happen. To me, the sad thing is that the final version will most likely be made just before a passing vote and the public will not know what they are going to be facing. Keep this prediction in mind and let me know if you think I'm way off base on it. By the way, did you catch the question asked to the President about whether he would change his health coverage to the new government program? He didn't answer the question. I don't see any of our good reps saying they will give up lifetime health benefits and go to a public plan. Gee, what a surprise. So much for showing us the way by example.

The markets still have lots of momentum going for them. Every time it appears there might be a downward break, it is halted and the markets move back up. We haven't had a strong down day in a very long time, when considering July, for instance. On Thursday we did see a drop in the gain of about 1/2 of what it was earlier in the day---and that came right before the close. Friday's movement showed a return to the plus side early on, but it does seem that it is tougher to increase the gains in any measurable amount.

News reports are confusing. What is normally bad news is being ignored--again. Earnings are concentrating on estimates and not comparisons to last year at the same time. Almost all of the "experts" have declared the recession over. I remain conservative in my outlook, being too old and seeing too many times when reality is quite different from the expectation. I'm in line with people from Missouri--they have to be shown reality, and I'm right with them. The Dow is having the best July this century because of these expectations and interpretations of the economic reports.

Oil has returned to being ridiculous in its pricing system. We are back up near $70/barrel and there is no good reason for it. The people that can solve this problem REFUSE to be honest and deal with the speculation that is rampant in that market. We will continue to bring this up as long as this is allowed to continue. We beat it down last year, but the ugly head of speculation has reared itself--again. Keep writing to your reps---all we need to do is raise the margin requirement from the obscene low of 5-7% (a main cause of the Great Depression) to be only the same as the stock market margin requirement of 50%.

Late news---Toward the end of the week it was reported that the "clunker car buy-back program" had to be stopped--at least temporarily. Apparently they ran out of the money that was allotted for this program which was to help the auto industry sell new cars. Can we say that it worked too well? It appears that there are lots of cars out there that qualify and that people really do want to get new cars--if they are more affordable.

Stay tuned..........................

Today's Thought---
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Especially for young people---Save for retirement starting with your first paycheck ( put away 10% as tho you never received it.)

Mike

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