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- Modest bounce accompanied by high volatility and high volume.
- Profit warnings and layoffs. And the mainstream economists thought that was behind us.
- It will be a dicey week but we expect upside at first before more September selling resumes.
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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

EASI (Engineered Support--$57.75; +0.92; optionable): Defense. Splitting 3:2 on Oct. 31 (Boo!).
Company Profile
STATUS: Testing the breakout. Still testing the breakout, holding above the 10 day MVA on the close (57.58). This is the first test since its breakout, and it is a good entry point as discussed with HSIC. Again it is a market leader in the right sector at the right time and the split adds to that momentum.
Volume: 216.25K Avg Volume: 205.681K.
BUY POINT: $58.95 Volume=304K Target=$66 Stop=$56.25.
POSITION: UFE KL - Nov. $55c (70 delta) and/or Stock.

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Upstart medical technology company Liposcience Inc. delayed a $75 million initial public stock offering planned for late Thursday, deepening the worst market for IPOs in a decade.

Raleigh, North Carolina-based Liposcience now hopes to sell its shares on Monday, according to Merrill Lynch, the investment bank managing the sale. Liposcience expects to raise $70 million to $80 million from the sale of 5 million shares at $14 to $16 a share.

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