Jun 22, 2009 - Issue #168
EK - Update
The weekly charts have currently installed a significant bullish line of support from
the 3/6 low of 2.01 to the 5/15 low of 2.44. Because of this technical improvement, a
case can be made, IMO, for buying the Oct 2.50 Calls (.80). You would have to go back
to early 2007 to find the last time EK showed a support line (which was broken when the
stock passed 25 on the way south).
CNBC has yet, to my knowlege, interviewed any analyst covering the stock. I interpret
that to mean the stock has not been 'talked up'. When a stock finds support without
media hype, I pay attention. 'Big money' tends to be 'smart money' and has been known to
quietly accumulate large positions over time at bargain prices. In technical parlance,
stock is said to be moving from 'weak hands' to 'strong hands'. Is that the case here?
Meanwhile, back at the Dow, is the market working on putting in the right shoulder of
an inverted head-and-shoulders formation? Notice how the DJ-30 and the SP-500 look
similar in shape? Does that tell you anything?
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):
Dow score card for the week ending 6/19/09.
DJ-30: 8539.73 -259.53 -2.95%. The Real World (arithmetical) DJ-30: 37.67 -1.14 -2.95%.
UP: 4, Down: 26.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 3 (-10) 10%:
HPQ, JNJ, MSFT.
Consolidating (Generally Lower Highs/Higher Lows) 20 (+3) 67%:
-*AA, -*AXP, BA, -*BAC, CAT, -*CSCO, -*CVX, -*DIS, HD, -*IBM, -*INTC, KO, MCD, -*MMM, PFE,
T, TRV, UTX, VZ, -*XOM.
Declining (Generally Lower Highs/Lower Lows) 7 (+7) 23%:
-*DD, -*GE, -*JPM, -*KFT, -*MRK, -*PG, -*WMT.
+/- 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!