Jun 15, 2009 - Issue #167
EK - Eastman Kodak's Turn?
EK - Eastman Kodak's turn? A former component of the DJIA (it is still a member of the
SP-500), EK has seen better times but is that about to change? If EK hits $3.00, I
believe computer screens will be lighting up all over the place.
CNBC has not, to my knowledge, had any guest analysts mentioning EK. That could be a plus.
One could simply buy the stock (2.95) and takes your chances (the current price is
almost like buying a permanent Call Option anyway) but, IMO, an interesting Option play
may be available:
Buying the EK Oct 2.50 Call (0.95) and selling the EK Oct 2.50 Put (0.45). This is known
as 'synthetic' stock (long Call/short Put). The above example would net out at a 0.50
debit (close to parity). If the orders were 'contingent' upon EK trading at 3.00 last, nothing would happen
unless the stock actually traded at 3 (or higher). The actual prices would depend upon
market conditions prevailing at the time of the trade, but the 'risk profile' would be
identical to that of being long stock only with less cash initially layed out. That's
known as leverage.
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?
6/22 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):
6/17 (Transportations) FDX.
Dow score card for the week ending 6/12/09.
DJ-30: 8799.26 +36.13 +0.41%. The Real World (arithmetical) DJ-30: 38.81 +0.16 +0.41%.
UP: 18, Down: 11, N/C: 1.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 13 (+1) 43%:
AA, +*AXP, +*BAC, +*CSCO, +*CVX, +*DIS, HPQ, IBM, +*INTC, +*JNJ, MMM, MSFT, XOM.
Consolidating (Generally Lower Highs/Higher Lows) 17 (+1) 57%:
-*BA, CAT, DD, GE, HD, +*JPM, -*KFT, -*KO, -*MCD, MRK, PFE, PG, T, +*TRV, -*UTX, VZ, -*WMT.
Declining (Generally Lower Highs/Lower Lows) 0 (-2) 0%:
+/- 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!