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Jan 28, 2008 - Issue #095

Ditto!

Ditto! Nothing has changed. All rallies are sellable until proven otherwise. Has a bottom formed? Probably. Temporarily, at least. Is it a significant bottom? It will have to be tested. That means a rally will have to come first. Sell the rally. Then will come the test. Make them prove it. When a major bottom forms, there will be plenty of time to get in. Don't let some 'expert' appearing on CNBC stampede you.

Speaking of CNBC, the technical analyst from Oppenheimer was interviewed recently. They should have him on regularly. He tells it like it is. Anyone that is not afraid to admit they are uncertain is someone you can trust. His work is first class.

Have you seen the subprime mess on 60 Minutes (CBS)? We were told it was 'contained'. Yeah, right. Contained to planet Earth! This is far from over. What further effect will this have on the stock market? That's the question.

It was reported this week that many investors were stampeded into the commodities markets. Predictably, they've been wiped out. Anyone that can't successfuly trade stocks has no business trading futures. Did they think it was going to be easier?

Can't you just see the lawyers suing over 'suitability' issues?

Back to the stock market. How low is low? Either we're on the bottom now or we're not. If not, then the bottom could be much further down. The bottom is reached when the last seller has sold. That means capitulation. Have we seen capitulation yet? we've seen a lot of selling, but have we seen the end? I'm confident that the answer will be revealed in the charts as the future unfolds. I'm confident I'll recognize it when I see it. Are you?

Dow score card for the week ending 1/25/08.

DJ-30: 12207.17 +107.87 +0.89%. The Real World DJ-30: 50.06 +0.45 +0.89%.

UP: 16, Down: 14.

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

Rising (Generally Higher Highs/Higher Lows) 4 (+3) 13%:

+*GM, HD, +*JPM, +*UTX.

Consolidating (Generally Lower Highs/Higher Lows) 14 (+9) 47%:

+*AA, +*AXP, +*C, +*CAT, +*DD, +*DIS, +*GE, +*HON, IBM, +*INTC, +*MCD, +*MMM, +*MSFT, WMT.

Declining (Generally Lower Highs/Lower Lows) 12 (-12) 40%:

AIG, BA, HPQ, -*JNJ, KO, -*MO, MRK, PFE, PG, T, VZ, XOM.

+/- denotes change of direction.

* denotes change of category.