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- Slow, slow, slow before the long weekend.
- Chicago manufacturing improves, consumer spending strong, sentiment not diving.
- Stocks and indexes at rally points, but pre 9-11 will there be an incentive to buy?
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2) Stock Splits

Playing stock splits can be very profitable, but it takes know-how.

Our stock split service focuses on three main types of plays:

1) pre-announcement (where we forecast an upcoming split prior to the company making the announcement); 2) pre-split (these plays are made in the days leading up to the actual split day); and 3) post-split plays (plays made after the actual stock split where the stock is showing continued or renewed strength).

We play pre-split plays as short-term plays. We get in when the technical indicators show us things look right, grab as much as we can, and get out, always being conscious of resistance and support. These stocks are highly volatile at this time, and can turn on you quickly. Don't let good profits disappear. Watch for turns, especially when a stock trades in a wide range and finishes off its high. That is a sign these stocks often give you that they are running out of steam. We usually get out and ask questions later. We can always get back in. We like to play in the money calls, preferably two strike prices in the money as this usually gives us a greater delta (the percent an option will mover versus the stock's movement). We prefer deltas of 75 or better. This means if the stock moves 1 point, the option should move three-fourths of that point. That means up or down.

Remember, wait to see the stock start to move up. Don't just blindly make a play and don't try to guess tops and bottoms. We can look at indicators to give us a clue as to what will happen, but we need the stock to confirm it for us. Here's a pre-split play to watch and our current analysis.

Chart by StockCharts.com

DORL (Doral Financial--$42.39; +0.35; optionable): Splits 3:2 on 9-16-02.
Company Profile
STATUS: DORL has been toying with us, giving big intraday bounces the past two sessions and then retreating to close. It is trying to make a move, and we are going to stay with it. With $2 intraday moves, if we get in we can get a good ride. The goal is not to make a killing but to take advantage of the pre-split volatility, and this one is giving us that.
Volume: 296.631K Avg Volume: 437.399K.
BUY POINT: $42.75 Volume=410K Target=$45.94 Stop=$41.25.
POSITION: QDL BG - Feb. $35 c (75 delta, low OI) OR QDL KG - Nov. $35 c (74 delta) and/or Stock.

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Top current and former WorldCom Inc. (WCOEQ.PK) executives scored millions of dollars from hot initial public offerings made available to them by Salomon Smith Barney and its predecessor companies, records released on Friday by the U.S. House Financial Services Committee showed.

Bernie Ebbers, the former chief executive of WorldCom, made some $11.1 million from 21 IPOs, including $4.56 million off the sale of Metromedia Fiber Network (MFNXE.PK) shares and almost $2 million from rival Qwest Communications International Inc. (Q.N) shares, according to the documents.

(This IPO story is continued on our website in the IPO Forum.)