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Dec 22, 2008 - Issue #142

Ticking Time Bomb

CNBC had Bernie Madoff to fill air space (over and over) as many denizens of Wall Street are gone for the holidays. The 'triple witch' December options and futures expiration was pretty much a non-event. No one waits until the last minute to unwind or roll their positions anymore.

As usual, the 'advice' on how to avoid being taken by investment advisors is too late for the victims: "Don't let advisors handle your funds or securities." Duh!!!

Have you noticed the steady decline in volatility lately (67% less than a month ago)? Could it be that complacency is setting in? Jan '09 is nigh. President-elect Obama has stated, "things will get worse, before they get better." What is there to be complacent about? Moving averages (20, 40, & 200 sma) are anything but bullish. Options are not historically cheap but they are a lot cheaper than they were only a month ago. Should we be getting ready to buy some cheap 'insurance'?

Heads Up

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 12/17/08.

DJ-30: 8579.11 -50.57 -0.59%. The Real World (arithmetical) DJ-30: 35.90 -0.21 -0.59%.

UP: 13, Down: 17.

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

Rising (Generally Higher Highs/Higher Lows) 6 (n/c) 20%:

CAT, +*IBM, +*JNJ, +*MRK, PFE, +*UTX.

Consolidating (Generally Lower Highs/Higher Lows) 24 (+2) 80%:

AA, AXP, BA, BAC, C, -*CVX, DD, DIS, GE, GM, HD, -*HPQ, -*INTC, JPM, KFT, KO, MCD, +*MMM, MSFT, +*PG, T, VZ, WMT, -*XOM.

Declining (Generally Lower Highs/Lower Lows) 0 (-2) 0%:

None.

+/- denotes change of direction.

* denotes change of category.