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DAY 79

UPDATE: Friday, 13-May-2005 10:52 AM

Today is a mid month of May wrap up and discussion about the next couple of weeks.

First some trends. The stock market is stuck on a choppy trading range and the market has had downward pressure. A lot of that has to do with rising interest rates and higher cost for oil. The rates are going up (a good thing -READ the ARTICLE BELOW) and oil is going down, finally. Hope the trends continue. Yes, the interest rates need to be at healthy levels.

Let me point you to an excellent article written in 2004 about OIL by Donald Luskin at Trendmacro -a consulting firm. Below is a short paragraph from it, and the link below that will open a new page.

--------START ARTILCE:

If the Fed signals clearly that it's going to keep a steady hand, and keep moving up interest rates until they reach more normal levels, then my bet is that the oil price will stop rising and even fall back considerably, back into the mid to high 30s. When that happens, the double sigh of relief — relief that prices are lower, and relief that the Fed got it right — ought to drive a monster rally in stocks.

I think that's the way it will ultimately play out. Will it happen tomorrow? Sadly, no.

-----------CRDIT to the WRITER:

Donald Luskin is chief investment officer of Trend Macrolytics, an economics consulting firm serving institutional investors.

------------The article is here @SMARTMONEY.COM

Well, he ends "will it happen tomorrow" and the answer is NO, but that was 2004. HOWEVER, I feel that those trends are occuring NOW!

Then now is the time to plan and take advantage of what will happen in the next several months.

Do I think the market will rally like a monster? NO, not all of a sudden at the begining of the summer. It will later in the year, and I want to be ready for it. Get some of those PENNY DOUBLING EVENTS done!

The reason that I am discussing all of this now is because I purchased LNG puts a while back and the selling decision is being made this week. Anyway, for all the put options I plan to make between 400% and more return. The puts were purchased at pre-split $76 per share and at that time I valued LNG at 50% of the stock price. Well, in the last many week the price had steadily kept falling. I see the price eventually setteling around $20 (post split) price. Now is the time to sell!

READER POINT: When I get returns over 500% I am NOT going to discuss it. The reason is that my normal target annually is 100% return and obviously I have to do that to keep doubling the pennies. So, as I test my theories and practice my plan, I will not keep writing about returns over 500% --Yes, I don't want to boast or give you the wrong impression. Such returns are very rare and are the exception.

IF you try something a bit stupid like these return, I'll guarantee that you'll regret it rather quickly and lose all of your funds.

SO, anyway, LNG for the life of me I could not figure out why the stock was so high. So, I spent sometime looking at the volume action and purchased the puts when it was right. I wanted to do the same for TRAVELZOO, last December, but I could not as the stock did not have put options. No wonder. Look where TZOO went last quarter.

OK, now with LNG I have put up all 80 of my put option contracts for sale (close) and hope to sell them before the end of the month. As I have said many times I do not hold these contract near their expiration dates. I just hold them to when I think I have the best price, and I close them out.

After I close out the put options, I will look for the following conditions --what is the market trend? Then I will once again purchase options going long and then look for other stocks that have reached their peek and will fall. Everystock eventually falls. Nothing can stay up there for ever, on a relative basis, and the idea is to stay once step ahead of the masses when making the buying and selling. I have done that relatively well for 15 years.

I also want to talk about what you see as a failure --MY Apple Computer pick this quarter. Apple completd what I think is a LONG CUP formation. Now the handle of that up is being built.

What will Apple Computer do next? Well, Jobs and Co. keep delivering great products so I may have one more Apple calls purchased later in the summer, but that is it. After that I consider APPLE too big of a company for me to work with.

So, what next?

There is a lot of planning for my trip, the discussions that I need to have to get all the programming and modifications complete at maxsimo.com.

I also need to clean up my office area a bit. No, let me correct that --a LOT and make a clean work area for my return.

Lastly, I have some setup issues with the support site at maxsimo.org that I need to finish. I have the thoughts written in my 'to do' list, but need to now transfer it to the support forum that I have setup.

A lot to do today. Perhaps, tomorrow, I'll update you on all the items that have been done for maxsimo.com.

Ok, long day. Out for now. Sam

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