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Jan 20, 2009 - Issue #146



Timing Alert



'Timing Alert', as in, "Hold till you see the whites of their eyes!" In the market, timing is everything.

CNBC will, no doubt, be focused on earnings reports. They may not be aware of some interesting technical developments that have occurred recently.

It has been a long time forming but this past week has finally seen the confirming installation of significant downward lines of resistance on the following weekly charts:

AA, CAT, CVX, DD, DIS, HD, INTC, JNJ, MCD.

That's 9 of 36 Dow components, fully 25% of the index.

In the case of AA, for example, extending from the 5/19/08 high of 44.77 to the 1/2/09 high of 12.44.

Usually, the appearance of these trend lines announces the commencement of a declining line of least resistance in the intermediate term. However, when the construction of these lines are possible only after a longer span of time they are, usually, indicative of a conclusion. In other words, we're probably closer to an end, rather than a beginning, of a decline.

In any event, the penetration of such lines, especially on a closing basis, is the market indicating a change of trend.

Where are we now? In my judgement, we should be alert to the possibility of initiating long positions.

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?

1/26 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):

1/20 BAC, IBM, JNJ, (Transportations) CSX.

1/21 UTX, (Transportations) AMR, BNI.

1/22 MSFT, (Transportations) LUV, UNP.

1/23 GE. (Transportations) GMT.

1/26 AXP, CAT, MCD, (Transportations) CND.

1/27 DD, VZ, (Transportations) NSC, CHRW, JBHT.

1/28 BA, PFE, T, (Transportations) LSTR.

1/29 MMM, (Transportations) JBLU.

1/30 CVX, PG, XOM, (Transportations) YRCW.

Dow score card for the week ending 1/16/09.

DJ-30: 8281.22 -317.96 -3.70%. The Real World (arithmetical) DJ-30: 34.66 -1.33 -3.70%.

UP: 5, Down: 25.

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

Rising (Generally Higher Highs/Higher Lows) 1 (-1) 3%:

KFT.

Consolidating (Generally Lower Highs/Higher Lows) 9 (-16) 30%:

GM, -*HPQ, IBM, MMM, MRK, MSFT, PFE, +*WMT, XOM.

Declining (Generally Lower Highs/Lower Lows) 20 (+17) 67%:

-*AA, -*AXP, -*BA, -*BAC, -*C, -*CAT, -*CVX, -*DD, -*DIS, -*GE, -*HD, -*INTC, -*JNJ, JPM, -*KO, -*MCD, -*PG, -*T, -*UTX, VZ.

+/- 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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