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Jun 1, 2009 - Issue #165



GM Out?



GM out of the Dow? A better question: Why is it still in? 'Blue Chip', my butt! Why are taxpayers being forced to own this piece of crap? If this isn't American Socialism, what is?

As a contrary investing strategy: Whatever the administration wants us to 'bail out', go short, instead (Go back and see how this strategy would have worked out).

The Dow scorecard has bunched up in the middle into a big consolidation. From here, the market either continues upward or pulls back. I'm looking for the latter. I don't expect this market to go anywhere until the March low is tested. For whatever reason, many stocks 'technically' look stronger. That can change, of course, but if a pullback results in a strong bottoming formation (especially as it relates to the March low) bullish strategies would be indicated. Until the market tells us otherwise, we are still in a bear market. A Fibonacci retracement tool is most useful here.

Heads Up

W. D. Gann, a keen market observer, although not an astronomer, nevertheless, was fascinated by the apparent coincidence of important market 'pivot points' and astronomical dates. Theories exist for estimating time and price of important market turning points but astronomical occurrences are computed with mathematical certainty.

There is no logical reason why these occurrences should coincide yet, empirically, they have. The 'Full Moon' and 'New Moon', among others, have been cited. Therefore, one might be well advised to be aware of their occurrence. Note: The first 5 business days of 2008 concluded on a 'New Moon' and we all know how that worked out. Coincidence?

6/7 Sunday - Full Moon (Observe Friday 6/5 & Monday 6/8 market price action).

6/22 Monday - New Moon.

During the next two weeks, the following Dow components report earnings. Keep a sharp eye out for possible price swings leading up to 'earnings day' (Subject to revision):

None.

Dow score card for the week ending 5/29/09.

DJ-30: 8500.33 +223.01 +2.69%. The Real World (arithmetical) DJ-30: 35.57 +0.93 +2.69%.

UP: 28, Down: 2.

Trends (weekly charts): This is the subjective part.

Rising (Generally Higher Highs/Higher Lows) 4 (-1) 13%:

KO, MCD, MRK, +*MSFT.

Consolidating (Generally Lower Highs/Higher Lows) 25 (+6) 83%:

AA, +*AXP, BA, BAC, C, CAT, +*CVX, -*DD, DIS, GE, +*HD, HPQ, IBM, INTC, JNJ, JPM, KFT, +*MMM, PFE, -*PG, +*T, UTX, +*VZ, WMT, XOM.

Declining (Generally Lower Highs/Lower Lows) 1 (-5) 3%:

-*GM.

+/- denotes change of direction.

* denotes change of category.





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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