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- Friday the thirteenth continues the low volume selling.
- Deflation fears rise based on the PPI, but the PPI does not support those fears.
- Sentiment in Michigan is better than expected.
- Large caps, large cap indexes look sniveling, but small caps and breakout stocks hold fast and even improve on the session.
- Subscriber Questions.
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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).

For post-splits, we can play them as we would pre-splits (very short term), but we prefer to stretch our horizons, playing the trend. When playing options, we look further out, 2 or more months at least. We let the trend carry us along if there is one, but we will also take profits if the technical pattern degenerates, e.g., breaks a trendline. The main difference between post-splits and pre-splits plays is that we really have to like the pattern. Pre-splits can run right before their splits even with poor technical indicators. For post-splits, we are looking at the stocks from more of a longer term "would I buy this stock at this juncture?" position. Now there are times when a hot stock splits and investors pile in to get in while the stock is 'cheaper.' We play those, but with more of a short-term, pre-splits mentality in that we will be ready to get out fast if the momentum fades.

Remember, everything we do has to pass muster with the market that day ... don't fight the market on these plays. Here's a post-split play to watch and our current analysis.

Chart by StockCharts.com

EXPD (Expeditors Intl.--$33.9; -0.1; optionable): Air delivery & freight.
Company Profile
STATUS: Testing the breakout. EXPD is showing some big upside volume spikes the past two weeks as the stock moves laterally below 34 and climbs the 10 day MVA (33.60). It is marching up the short term MVA after making its breakout in mid-November. These volume spikes are what we call ‘get ready’ spikes, meaning that the stock is under accumulation as it continues its lateral move. Looking for a big breakout here. This is another example of the economic recovery showing up in economically sensitive stocks; EXPD has rallied well, but is now preparing to rally again. That indicates stocks appear ready to price in more economic recovery.
Volume: 1.284M Avg Volume: 610K
BUY POINT: $32.08 Volume=750K Target=$38 Stop=$32.45
POSITION: URP BF - Feb. $30c (62 delta) or URP EF - May $30c (62 delta, low OI) and/or Stock.

Click here for more information on our Stock Split Report!

Ford Motor Co.'s (F.N) board of directors has formed a committee to study a stock deal worth about $8 million to chairman and chief executive Bill Ford Jr., the company said on Thursday.

Bill Ford sent an e-mail message to employees explaining his purchase of 400,000 shares of Wall Street firm Goldman Sachs Group Inc. (GS.N) during its initial public offering in 1999, and vowing to never do anything to harm the company or employees' trust in him, a source familiar with the message said.

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