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May 14, 2007 - Issue #058
Hunky Dory, Not!
Dow score card for the week ending 5/11/07.
DJ-30: 13326.22 +61.60 +0.46%. In the Real World: 54.66 +0.25 +.47%.
UP: 16, Down: 14.
Trends (weekly): This is the subjective part.
Rising 18 (-1) 60%:
+*AA, AIG, AXP, CAT, DIS, GE, HON, HPQ, IBM, +*INTC, JPM, KO, MCD, MMM, MO, MSFT, UTX, VZ.
Consolidating 9 (n/c) 30%:
BA, C, -*DD, HD, MRK, PFE, -*T, WMT, -*XOM.
Declining 3 (+1) 10%:
-*GM, JNJ, PG.
+/- denotes change of direction.
* denotes change of category.
Hunky Dory, Not!
"Jump in, the water's fine!", sayeth the "experts" appearing on CNBC et al.
We are told the world is awash in liquidity. Private equity is buying up everything in
sight! Interest rates are so cheap, if you can "fog up a mirror", you can borrow all the
money needed to do a deal! Corporations are buying back their own stock! Yada, yada, yada!
This is just too pat! When grandmothers, who wouldn't go near the stock market when prices
were low within the last couple years, are asking their stock market guru grandson
portfolio managers who, by the way, have probably never lived through a bear market, for
tips on stocks, don't you think sirens should be going off in your head? They are in mine!
Volatility indexes are high at market bottoms and low at market tops. Where are they at
now? Look no further than the biotechs, to see what can happen in the blink of an eye.
If it was "dumb" to stay out of the market when it was 50% cheaper, why is it "smart" to
begin getting in now? On the other hand, it's not difficult to see "set ups" developing
for bearish scenarios. All it takes is some event to trigger them off.
Buyers vs. sellers. Each doing the opposite. They both can't be right.
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!