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- Market consolidates on a week of negative news.
- Confidence lower but not tanking as personal spending results indicate.
- Monday gap lower was the extent of the damage for the week.
- Troops slow advance ahead of RG showdown, but market seems to be adjusting to the idea.
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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

TTC (Toro--$70.75; +0.49; optionable): Motorized farm and home tools. Splits 2:1 on 4-15-03.
Company Profile
STATUS: Testing the breakout. After the Thursday test toward the 18 day MVA (69.59), TTC started higher Friday but could not muster volume. If some volume comes in we will look at new positions on this good breakout test.
Volume: 61.8K Avg Volume: 98.041K
BUY POINT: New: 70.88 (orig. $70.05; $68.85) Volume=137K Target=$76.55 Stop=$65.35
POSITION: TTC FM - June $65c (72 delta, low OI) &/or Stock.

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Between the bagpipes squealing up Fifth Avenue on St. Patrick’s Day and the rockets’ red glare that lit up the Baghdad night skies just two days later, the stock market staged one of the most powerful weekly rallies ever seen.

Only the IPO market was missing in action. Not one deal was done. The week ended with the first day of spring, but so far, no signs of life are stirring in the IPO market.

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