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Feb 26, 2007 - Issue #047

SOS NYSE Specialist Firms!

DJ-30: 12647.48 -117.53 -0.92%. In the Real World: 52.62 -0.50 -0.94%.

UP: 6 (-21), Down: 24 (+21).

Trends (weekly): This is the subjective part.

Rising 15 (-4):

AA, BA, C, DD, HON, JPM, KO, MCD, MO, PG, T, UTX, VZ, WMT, XOM.

Consolidating 11 (+4):

AIG, AXP, -*CAT, -*DIS, GE, -*GM, -*HD, HPQ, IBM, MRK, PFE.

Declining 4 (n/c):

INTC, JNJ, MMM, MSFT.

+/- denotes change of direction.

* denotes change of category.

Note that the Rising trend category has slipped to 15. That's half of the components. If it slips below 15 (less than half) that would indicate internal weakness. Watch how the Consolidating category resolves itself. Declining category numbers 4, so far.

Market volatility is at historically low levels reflecting lack of fear. If history is any guide, that won't last.

Gold, silver, and platinum are rising. Historically, not good for stocks.

SOS NYSE Specialist Firms!

CNBC reported NYSE specialist firms sent out a distress signal Friday announcing that either the rules must change or they will go out of business.

In other words, they can't compete against the new computerized order entry system. Apparently, too much order flow is bypassing the specialists' books. Ouch! Boo Hoo!

As much as I love tradition and all that, technology changes things. Adapt or perish.

If technology is proving the specialist system obsolete, so be it. All the other exchanges have competing market makers. Why not the NYSE? Or let the NASDAQ and the NYSE merge and get it over with. The markets' will go on with, or without, the specialists.

Last week, Merrill Lynch upgraded GM to a BUY! Ever notice how often a stock tanks right after receiving the "kiss of death" Buy recommendation from a big brokerage firm? Funny how that works.