Apr 26, 2010 - Issue #212

Financial Reform

Financial Reform. As in another Obama/Pelosi/Reid big government power grab!

CNBC, tell the truth, if you dare.

Phil Town, author of 'Pay Back Time', has an excellent 'fundamental' approach to successful investing (he calls it 'stock piling') in which one buys in 20% chunks on the way down.

What's wrong with going 'all in' (100%) as long as the entire position is protected by purchasing the nearest in-the-money Put Options? The only risk is the 'time value' portion of the Puts. The 'intrinsic' portion is a 'wash'. If the stock goes up, you win massively. If the stock goes down (as he hopes), you exercise and get your money back. Buy all over again at the new lower price (it's called 'rolling down'), protecting the new position with new Put Options.

Warren Buffet (Phil's hero) has been known to use Put Options in his investment purchases, why shouldn't you?

One great value of protecting a position with Puts is never having to liquidate holdings at a loss because of unexpected personal circumstances that have nothing to do with the market.

Why short stock if suitably priced Puts are available? Speaking of which, have you noticed PG might be such a candidate?

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?

4/14 Wednesday - New Moon.

4/28 Wednesday - Full 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):

4/26 CAT.

4/27 DD, MMM.

4/29 PG, XOM.

4/30 CVX.

5/4 PFE, MRK.

5/6 KFT.

Dow score card for the week ending 4/23/10.

DJ-30: 11204.28 +185.62 +1.68%. The Real World (arithmetical) DJ-30: 49.42 +0.82 +1.68%.

UP: 24, Down: 6.

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

Rising (Generally Higher Highs/Higher Lows) 13 (+1) 43%:


Consolidating (Generally Lower Highs/Higher Lows) 13 (+1) 43%:

+*AA, BAC, DIS, -*GE, HPQ, -*IBM, -*INTC, JNJ, KO, PFE, PG, +*TRV, +*WMT.

Declining (Generally Lower Highs/Lower Lows) 4 (-2) 13%:

-*JPM, -*KFT, MRK, VZ.

+/- 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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