Apr 7, 2008 - Issue #105

April Fool?

April Fool's Day joke? On Tuesday, April 1st, the market virtually exploded to the upside. Commentator after commentator, guest after guest on CNBC were taken aback at the strength of the rally. Word was that short sellers were covering. All the stocks in the Dow that day were up! Speculation was: Is the long decline over? Is this the beginning of a new up leg? Is this a new bull market?

Well, is it??? Where was the follow through during the rest of the week?

If it is not the beginning of a new bull phase, then it most assuredly is an upward rally within a bear market!

Some CNBC guests were encouraged because the market did not give back the gains, as reflected in the Dow average. A look at the individual Dow components might yield a somewhat different view. Some have given back their gains. Averages can be, and are, misleading. Especially, this one. Also, the volume was not especially huge. Another warning sign!

And, finally, too many people, in my opinion, are just too willing to be optimistic. Ask yourself, and be honest, are markets really all that accomodating to the masses? Do the masses merely utter, "Let there be a bull market!", and it comes to pass?

Bull markets are born out of the depths of despair. Are we really in the depths of despair? Things are not the best, economically speaking, but can they get worse? You betcha!

Dow score card for the week ending 4/4/08.

DJ-30: 12609.42 +393.02 +3.22%. The Real World (arithmetical) DJ-30: 51.64 +1.62 +3.23%.

UP: 28, Down: 2.

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

Rising (Generally Higher Highs/Higher Lows) 18 (+14) 60%:

+*AIG, +*C, CAT, +*CVX, +*DD, +*DIS, +*GE, +*GM, +*HD, +*JNJ, MCD, +*PFE, +*PG, T, +*UTX, +*VZ, +*WMT, +*XOM.

Consolidating (Generally Lower Highs/Higher Lows) 11 (-15) 37%:


Declining (Generally Lower Highs/Lower Lows) 1 (+1) 3%:


+/- 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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