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Sep 18, 2006 - Issue #024



Change-up!



Dow score card for the week ending 9/15/06.

DJ-30: 11560.77 +168.66 +1.48%.

UP: 24 (+16), Down: 5 (-17), NC 1 (+1).

Trends (weekly): This is the subjective part.

Rising 18 (+7):

+*AIG, DIS, GM, +*HD, HON, HPQ, +*IBM, INTC, JNJ, +*JPM, KO, MCD, MO, +*PFE, T, +*UTX, VZ, +*WMT.

Consolidating 9 (-4):

C, CAT, DD, GE, MMM, MRK, +*MSFT, PG, XOM.

Declining 3 (-3):

AA, AXP, BA.

* denotes change of category.

+/- denotes change of direction.

What a difference a week makes! Last weeks' compressed spring has sprung big time.

The daily charts went ballistic. Perhaps a little too ballistic? It's going to be a tough act to follow.

The problem: Some of the high-flyers look like the climax of a fireworks display. They went parabolic. Many stocks gapped up. It's most difficult for markets to maintain that trajectory. This is exactly what many past tops have looked like.

Trying to establish positions under such circumstances is like trying to jump aboard a fast moving train as it's flying past a station. It's usually not a good idea to chase them.

An old Wall Street saying: Walk when buying, run when selling.

Examine such stocks for signs of exhaustion with a view to identifying good short selling candidates. See my page on Contrary Opinion.

However, at the other end of the spectrum, stocks breaking out of a long period of consolidation, following a prior period of declining trend, usually make excellent long candidates. I believe HD and INTC are such candidates.

Something new has been added this week, for your consideration: MarketClub. Check it out. Their "Big Footprints" signals are impressive, to say the least. They certainly called the turn on Oil. This is exactly the theme I've been talking about.

While you're at it, take a look at their InvestorFLIX service. If only this service had been available years ago, I'd have saved a bundle!

I still have yet to check out their FuturesAlerts service. I'll get back to you later on that.

Have a good week trading and, remember: There are old traders and there are bold traders, but there are no old bold traders!







Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!

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