Jan 10, 2011 - Issue #249



The First Five Days



The first five days of January, starting out the new year, are always watched for possible indications as to how the month will go which, in turn, might indicate how the year will go. It's not perfect but it works often enough to be worth paying attention to. Traders have to form trading plans and this is how it starts.

CNBC might even ask traders for comments on their plans. Don't be surprised if traders are reluctant to reveal what they're thinking. Smart traders classify their intentions 'top secret'.

The CBOE is initiating 'VIX' values on individual stocks, in addition to the market as a whole. Good move. Every professional Options trader is well aware of the historical and implied volatilities of the markets they trade. Buying low volatility and selling high volatility is the hallmark of a professional.

Countdown till 2012 elections: 95 weeks.

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?

1/4 Tuesday - New Moon.

1/19 Wednesday - Full Moon.

During the next two weeks, the following DJ-30 components report earnings. Keep a sharp eye out for possible price swings leading up to 'earnings day' (Subject to revision):

1/10 AA.

1/13 INTC.

1/14 JPM.

1/18 IBM.

1/21 BAC, GE.

Dow score card for the week ending 1/7/11.

DJ-30: 11674.76 +97.25 +0.84%. The Real World (arithmetical) DJ-30: 51.42 +0.43 +0.84%.

UP: 20, Down: 10.

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

Rising (Generally Higher Highs/Higher Lows) 17 (+7) 57%:

AA, +*BA, BAC, CSCO, +*DIS, GE, +*HPQ, IBM, +*JNJ, JPM, +*MRK, +*MSFT, +*PFE, +*UTX, VZ, +*WMT, +*XOM.

Consolidating (Generally Lower Highs/Higher Lows) 8 (-11) 27%:

AXP, CAT, -*CVX, -*DD, HD, KFT, MMM, PG.

Declining (Generally Lower Highs/Lower Lows) 5 (+4) 17%:

-*INTC, -*KO, MCD, -*T, -*TRV.

+/- 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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