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Aug 28, 2006 - Issue #021

As Expected!

Dow score card for the week ending 8/25/06.

DJ-30 11284.05 -97.42 -0.86%

UP: 13 (-14), Down: 17 (+14).

Trends (weekly): This is the subjective part.

Rising 14 (+1):

+*DIS, GM, HON, HPQ, +*INTC, JNJ, JPM, KO, MO, PFE, PG, T, VZ, XOM.

Consolidating 6 (n/c):

AIG, C, +*CAT, GE, -*MCD, MRK.

Declining 10 (-1):

AA, AXP, BA, DD, HD, IBM, MMM, MSFT, UTX, WMT.

* denotes change of category.

+/- denotes change of direction.

What does this portend for the upcoming week?

Well, for one thing, expect a lot more action this week. That's an easy call.

Why? Because this past week was relatively uneventful. It won't take much to kick it up a notch.

Markets behave similar to breathing: Inhale, exhale, inhale, exhale. The past week was, in my opinion, an exhale. Get ready to inhale.

The question is, as always, in which direction is this "breathing" effort going to take?

My guess: Down.

The market has gone up until it ran into resistance. Now that it has found resistance, it should decline until it discovers support. Inhale, exhale. Ying, yang.

Armies do the same thing: Always probing the opposing sides' lines, looking for weakness to exploit. Attack and counter-attack.

As traders, we aren't on either side. We're "guerillas"; self-employed mercenaries. We hide in the Wall Street "jungle" observing the battle between two great armies (Bulls and Bears). Our "mission" is to jump in on the side that's currently winning, extract our profit and disappear back into the jungle.

Speaking of which, the Bulls appear to be winning the INTC battle. So far, so good.