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Author: Mike Celeste Editor: Tony Ponzo December Circulation: 13662

Stat Sheet Week Ending December 17th 2005

ChangesWeekly
Indexes Points Percent
Dow+97.0+0.9%
S&P+8.0+0.6%
NAS-5.0-0.2%
SM 2005 stats: Basic up +39.71%; Big Dipper up +38.6%; CALLs up +502%; PUTs up +647%


Highlight of this past week
TXU led the week with an excellent gain of 71% in the CALL options and 100% in the PUTS. The stock made a tidy profit of 6.5 points, too.

NOTE: Since next week is Christmas weekend, we will not be sending a newsletter as we will be spending the time with our family and friends. Alerts however, will continue as usual.

In this Issue---
Testimonial of the Week---
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If this email from team member, Keith, doesn't knock your socks off, nothing will--read his unsolicited comments---

"Mike and/or Tony -
I wrote to you a couple of times last year, and I thought I should give
you an update on the progress of my portfolio using your option
strategy. I devoted $69K of my funds (starting Jan '05) primarily to the
call options, and committed to myself one year to determine if I could
make it work with actual money. Well, it is now at $200K and I've taken
$50K out for things like a new car, tuition for my youngest son, etc.
Otherwise it would be at $250K! Not bad for one year. Obviously, I plan
to keep using your service. Thanks a million, or at least a million in a
couple more years."

Auto Trading Program
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Another reminder that if you are interested in an easier, faster way of trading the SplitMaster strategies, with a low commission structure, send us an email with your questions to Contactus

SplitMaster Basic System---
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Two more Basic plays closed out this week, and both were nice winners---TXU and CDIS. Putting them in with the others that closed out this month, we are running at a nice 11% gain for the month of December. Remember, on an annualized basis, that is 132%. That leaves 5 more that are still active, of which 4 are at a profit, while the newest one, bought 2 days ago, is down less than 1 point.

Big Dipper System---
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We finally got a new hit on the BD system, and it is a 3-2 splitter, which are only on the BD list, not the Basic. Anyway, it is down since hitting the target buy price, but there is no news that I could find that would explain the drop. It has had a great run so far this year and maybe it was just time for some profit taking. There is lots of time left in this one, as it hit the BD price on its first day on the list.

Options---
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This is a story that never gets old. The options have been a real standout and we closed out TXU and CDIS this week. TXU is our highlight stock and the CALL did what it was supposed to--it went up and showed that 71% gain in the CALL and 100% gain in the PUT. We didn't have a CALL on CDIS, as we had a max buy price which was too low on buy day, but it came back down later and I know that some of you picked it up, as you wrote in. Those that bought the CALL on CDIS ended up with a good profit, if held until sell day. We have 5 more option plays going, plus 2 SPX plays (see below). Also see the Pattern/Probability section. You will note in Past Results for the options that we are currently up over 500% in the CALLS, year-to-date, and over 600% in the PUTS.

S+P 500 Options---
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On Thursday we entered 2 new plays by writing PUTS in this sector. There hasn't been much change yet, but one is even and one is ahead a little bit. It was not the best of times to get into this play, but we based a lot of the decision on the timing--it is December, and we expect December to be a good month.

The Quest---
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We have brought out the guns and fired a number of salvos into this system. You can see that we have a number of new plays going, and they are from the PP System. Because of the sell date on these, they will carry into the new year 2006, which means we have more than reached our goal of doubling from the beginniner of the year. In fact, we doubled that, too, so our original $1,000 is now over $4,000.

Chart Indicator---
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The Indicator is holding up, but the spread between the Positive/Negative neutral line is narrowing some. But---still positive, and we like that.

Stock Split Comments---
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There are 4 more Basic splitters coming up for buy date in December. That gives us a good number of splitters to carry into the new year.


Pattern/Probability System---
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After a whole lot of searching and analysis, we added a number of new plays into this new system. We remain very encouraged by the results thus far, and while the new ones, bought Thursday, aren't doing much, the rest of the market isn't doing much either, these last 3 days of the week. Keep in mind that for the time being, this system is being posted on the Past Dipper page, but we are taking steps to get a page for it by itself. It will be a Level 2 selection, so only option members will be receiving this one. Everyone can enjoy it in the meantime.

Credit Spread Options---
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Tony is our Guru on this system, and we have worked on two for this past week---SIE and CEDC. Also, PSYS looks interesting and might develop a decent credit spread. This system is for really experienced option players, so be careful. So far, we have won on all of them, but haven't posted them yet, as we are working on a design for the page--but--it is coming.

The Economy---
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This was another week where it was hard to find negative economic numbers. Nas did drop the last 3 days of the week, so we would like to see that reversed. Oil dropped some more, and significant to us consumers, gas dropped a nice steep amount. Here in CA, regular gas in our area is $2.09. We keep harping about the supply of oil and that with inventories building, at some point they have to drop the price of gas, and we think this is what is happening. Christmas sales will be a big feature the rest of the month and the "analyst experts" will have lots of fun debating what they think the results will be.

Today's Thought---
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It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you'll do things differently..... Warren Buffett
(Personal note---A good reputation is pricelss in worth.)

Mike

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