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Jan 1, 2007 - Issue #039
Get Ready to Rumble!
Dow score card for the week ending 12/29/06.
DJ-30: 12463.15 +119.93 +0.97%. In the Real World: 51.86 +0.50 +0.97%.
UP: 23 (+13), Down: 7 (-13).
Trends (weekly): This is the subjective part.
Rising 15 (n/c):
+*BA, C, DIS, HON, HPQ, +*IBM, JPM, KO, MCD, MO, +*MSFT, PG, T, VZ, XOM.
Consolidating 10 (n/c):
AIG, AXP, -*DD, -*GE, GM, HD, -*JNJ, MRK, UTX, WMT.
Declining 5 (n/c):
AA, CAT, INTC, MMM, PFE.
* denotes change of category.
+/- denotes change of direction.
Things are about to get "interesting!"
It appears that whatever year-end "tax selling" operations needed to be done was, for the
most part, accomplished the Friday before Christmas and then "everyone" took off for the
holidays. Makes sense.
Notice, although some Dow components changed places, the net trend change was zero. Happy
The markets (and control of Congress) will delay one day, in honor of the late President
Gerald Ford, before we begin to find out what it has in store for us for '07.
A review of the weekly charts shows an increase in new "significant" upward support trend
lines (see MSFT, for instance). Caution would dictate a discreet upward adjustment of
sell stop orders accordingly, in my opinion.
Option volatility cannot be expected to remain at current low levels, if history is any
CNBC-TV's Kudlow & Company announced that the Chicago Board Options Exchange (CBOE) and
the New York Stock Exchange (NYSE) received permission from the Securities and Exchange
Commission (SEC) to initiate new streamlined portfolio margin rules starting this April.
The purpose of the new margin rule changes is to enable market participants to more
efficiently utilize capital. Apparently, Europe is way ahead of us in that regard and we
need to catch up.
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!