Dec 17, 2007 - Issue #089
Silly Season? The last two weeks of the year when many, if not most, of the traders
(who've made their money for the year) take off till after the holidays. Only those
individuals that can't get away, such as specialists, market makers, etc. (that includes
CNBC personalities) that have to be there are present.
Expect the markets to be subject to abrupt swings as the December options expiration takes
place this upcoming Friday. The market makers will, no doubt, do their best to 'peg' the
nearest 'at-the-moneys' to their respective strike prices so that they expire worthless
and the 'floor' wins yet again.
And, of course, year-end tax selling can take place right up to the closing bell on
Rather than attempt to initiate new positions under these circumstances, one would be
well advised to relax and enjoy the time off. Review the past year and formulate trading
plans for the new year. There will be many exploitable trading opportunities for those
'serial opportunists' (Don't you just love that term?) among us who are prepared to act.
Note this week's results shows an increase in the rising trend and decreases in the
consolidating and declining trend categories while the average dropped sharply.
This seemingly paradoxical occurance is the result of an increase in the number of
rising 'significant' trend lines being put in place which is the markets way of telling
us where to place our trailing sell stop orders. It indicates where the next sell signals
will be if the new rising trend lines are violated.
Dow score card for the week ending 12/14/07.
DJ-30: 13339.85 -285.73 -2.10%. The Real World DJ-30: 54.70 -1.17 -2.10%.
UP: 7, Down: 23.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 14 (+4) 47%:
+*HON, +*HPQ, INTC, JNJ, KO, MCD, MO, MRK, +*MSFT, PG, UTX, +*VZ, WMT, XOM.
Consolidating (Generally Lower Highs/Higher Lows) 8 (-3) 27%:
+*AA, DD, DIS, GM, IBM, JPM, MMM, T.
Declining (Generally Lower Highs/Lower Lows) 8 (-1) 27%:
AIG, AXP, BA, C, CAT, GE, HD, PFE.
+/- 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!