Nov 30, 2009 - Issue #191

Crushing Debt!

Crushing Debt!

No better example exists than what happens to a nation that lives beyond its means than what happened in Dubai.

CNBC has no shortage of guest analysts saying, "It doesn't affect us!" Oh, really? What political party do they belong to?

Liberal Democrats, pissing on our leg and telling us it's raining, are calling for even more crushing debt upon the taxpayers saying, "We haven't spent enough!", and we all believe Nancy Pelosi, right?

Have you noticed the increase in volatility? Put Option protection is more expensive. Did you take advantage of prices when they were lower?

Some people are saying this will blow over. I'm not one of them.

Here's a new 'weapon' for your arsenal: ProShare Short S&P500 ETF (Symbol: SH). It works especially well in Self Directed IRA accounts. It's the 'mirror image' of the SPY. Basically, it allows you to own an ETF that is always 'short' the S&P500 without going thru a margin account. And, there are Options available. It just doesn't get any better than that.

So, when you want to be 'long' the S&P500, buy the SPY. when you want to be 'short' the S&P500, buy the SH. You can buy Puts to hedge and sell Calls to 'collar' your positions. Simple. There is no end to the strategies available to you. Flexibility on steroids.

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?

12/2 Wednesday - Full Moon.

12/16 Wednesday - New Moon.

12/31 Thursday - Full Moon (Blue 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):


Dow score card for the week ending 11/27/09.

DJ-30: 10309.92 -8.24 -0.08%. The Real World (arithmetical) DJ-30: 45.47 -0.04 -0.08%.

UP: 12, Down: 18.

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

Rising (Generally Higher Highs/Higher Lows) 9 (-5) 30%:

BA, +*CVX, +*GE, JNJ, PG, +*T, VZ, WMT, XOM.

Consolidating (Generally Lower Highs/Higher Lows) 20 (+4) 67%:


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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