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- Market erupts like St. Helens of old as investors rotate to stocks to start quarter.
- Then versus now: another 1980's-like inflection point?
- National manufacturing slips but shows signs of improvement, just like the overall economy.
- Japanese business confidence hits highs as Michigan consumer sentiment ebbs slightly.
- August construction spending rises to seventh straight record.
- Volume remains strong as techs stocks power through resistance, small caps surge to all-time high.
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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

Company Profile
After Hours: $28
STATUS: Cup w/handle. Explosive breakout move Friday as MRVL surged past its Sept highs and cleared the handle to its 12 month base. Volume was up, but was not what you would call blowout. Still, a very solid pattern sporting outstanding 5 to 1 accumulation and surging money flow leading the way higher. Relative Strength posted a strong breakout on the move as well, a very good corroboration of the move. Looking to start positions on a further move from here and then add some on a breakout test.
Volume: 6.024M Avg Volume: 4.766M
BUY POINT: $28.32 Volume=700K Target=$32.62 Stop=$27.22
POSITION: UVM BY - Feb. $27.50c (60 delta) &/or Stock.

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