Nov 22, 2010 - Issue #242

Q3 2010 earnings season ends

CNBC had nothing to report concerning the 'lame duck' congressional session for news of last minute legislation attempts. Nothing on taxes, so far. Reid wants to pass the 'DREAM Act' (read Amnesty for illegal aliens).

Could it be that Democrats, who won't be back, couldn't care less? They were sacrificed, listening to Pelosi. All they were interested in was moving out.

The real action takes place, after the new Congress is seated. Look for action on taxes, cutting spending, and repeal of Obamacare, for starters.

Business owners have already stated they do not intend to hire any new employees as long as this administration is in office. Obama has to go. Can you say, "impeachment"?

Does this market look 'toppy'? Is it time for a 'pull back'? Good question.

HPQ just put in a new significant downward resistance line, on the weekly chart, just before earnings. Is the market telling us something?

A tactic to keep in mind: Buying Puts and, simultaneously, selling Call spreads for credit provides interesting scenerios. The converse is Buying Calls and selling Put spreads. Pick your entry and exit points as you would for stocks.

Are you smart enough to see how this applies to HPQ?

Notice the moon is full?

Countdown till 2012 elections: 102 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?

11/6 Saturday - New Moon (Observe Friday & Monday market activity).

11/21 Sunday - Full Moon (Observe Friday & Monday market activity).

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):

11/22 HPQ.

Dow score card for the week ending 11/19/10.

DJ-30: 11203.55 +10.97 +0.10%. The Real World (arithmetical) DJ-30: 49.34 +0.04 +0.10%.

UP: 13, Down: 17.

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

Rising (Generally Higher Highs/Higher Lows) 2 (-3) 7%:

+*CAT, KO.

Consolidating (Generally Lower Highs/Higher Lows) 24 (+4) 80%:

AA, AXP, +*BA, BAC, -*CVX, DD, -*DIS, HD, HPQ, IBM, -*INTC, JNJ, JPM, +*KFT, MCD, MMM, +*MRK, MSFT, PG, TRV, UTX, VZ, WMT, -*XOM.

Declining (Generally Lower Highs/Lower Lows) 4 (-1) 13%:

CSCO, -*GE, PFE, -*T.

+/- denotes change of direction.

* denotes change of category.